Talk:Formulary apportionment

"Citation needed"
A Citation needed tag was added on the statement:


 * One draft version of a UK-US double taxation treaty included a provision to prohibit US states from imposing such requirements

This statement comes directly from the source already cited at the end of the paragraph. For clarity I repeated the citation in the middle of the paragraph too. If you look at page 254:


 * The world-wide unitary tax controversy arose in the late 1970s partly from a provision, which the US Senate rejected, to include a prohibition on state use of the technique in a bilateral income tax treaty between the UK and the US.

What the authors wrote there is verified by the draft version of the treaty itself. When the executive branch sent that over to Congress for approval, they included the following note (page 4):


 * A second new provision is found in paragraph 4 of Article 9 (Associated Enterprises). This provision represents the first attempt to bind State and local taxing authorities by a substantive provision of the treaty (other than non-discrimination). Under the basic rules of our other tax conventions a Contracting State entering into such tax conventions is prohibited from taking into account, in determining the tax liability of an enterprise doing business in that Contracting State, the income, expenses, etc. of related enterprises of the other Contracting State or in other countries if those enterprises are not engaged in business in the Contracting State, except to the extent that inter-company transactions are not conducted on an arm's length basis.


 * This treaty, for the first time, extends this limitation to State and local tax authorities with respect to enterprises controlled by United Kingdom residents. This limitation is directed at the practice of a few States which are attempting to take into account the income on a consolidated basis of all related foreign enterprises in assessing the State income tax of a single member of the related group doing business in the State. This method of assessment, which includes the burden of producing worldwide records of all of the affiliated companies, has raised many objections by our treaty partners and we are now seeking to deal specifically with this problem in our treaties. This broadening of the scope of the treaty has been discussed informally with the Chairman of the Foreign Relations Committee.

The actual Article 9, Paragraph 4 (page 15 of that document):


 * Except as specifically provided in this Article, in determining the tax liability of an enterprise doing business in a Contracting State, or in a political subdivision or local authority of a Contracting State, such Contracting State, political subdivision, or local authority shall not take into account the income, deductions, receipts, or out-goings of a related enterprise of the other Contracting State or of an enterprise of any third State related to an enterprise of the other Contracting State.

And later the document confirms that the Senate rejected that part in ratifying the treaty:


 * The Senate of the United States of America by its resolution of June 27, 1978, two-thirds of the Senators present concurring therein, gave its advice and consent to ratification of the Convention, exchange of notes, and two Protocols, subject to the reservation that the provisions of paragraph (4) of Article 9 of the Convention, as amended by the notes exchanged on April 13, 1976, shall not apply to any political subdivision or local authority of the United States; —Preceding unsigned comment added by 61.18.170.45 (talk) 12:02, 17 December 2010 (UTC)

The above material is probably too long for the actual article itself (which is supposed to be about formulary apportionment worldwide, not just in California), so I'll just leave it here on the talk page. Thanks, Eric Baer (talk) 11:26, 17 December 2010 (UTC)


 * My objection was to the word "draft". It was the signed treaty, as the citation makes clear.  I do not think you can call a treaty which has been signed and is subject to ratification a draft treaty.  I have expanded the article to make this clear, and added references for the foreign opposition. --Mhockey (talk) 14:30, 17 December 2010 (UTC)

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US vs International categories
These categories make the article US centric. US (=domestic??) and the rest of the world is ‘international’?? What about ‘in Ireland taxation’??

This is a global issue. Article restructuring required Riskit 4 a biskit (talk) 02:56, 19 January 2023 (UTC)