The Florida Department of Revenue ruled that a taxpayer was required to use an alternative method of apportionment for purposes of computing corporation income tax liability because the cost-of-performance method for sourcing advertising receipts did not fairly apportion income attributable to Florida. The taxpayer argued that the cost-of-performance methodology should be applied to its income and that none of the income-producing activity should be sourced to Florida because a greater proportion of the costs were performed outside the state of Florida. The department rejected this argument because, among other reasons, the income-producing activity was not directly performed by the taxpayer’s customer but, instead, was triggered by an independent third party.
Source: CCH Group
