Income taxation by states in a federation: allocation of business income
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Seminar
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Many federal countries have tax systems where the income tax is levied both at the federal and state government levels, such as the US and Canada and, until 1942, Australia. While many of the design features of these state-level income taxes vary, a common issue which all of them face involves the allocation of income of multi-state businesses between the states. This is also similar to the issue at the international level of allocation of income of multinational enterprises between countries, which has evolved using arm’s length pricing of transactions between business entities.
This presentation will discuss some of the methods for allocation of income of multi-state businesses used at the state level in the US and Canada and historically in Australia up to 1942, in particular the systems of formula apportionment and unitary combination of corporate groups which were developed in all of these countries. These methods will be compared with the current reform proposals in the European Union involving the Common Consolidated Corporate Tax Base.
Peter Mellor researches in the area of taxation and fiscal federalism in the Department of Business Law and Taxation of the Monash Business School and is currently completing a PhD at Monash in this area under the supervision of Professor Rick Krever and Dr Kathryn James. Peter has also assisted in the editing of a number of edited taxation volumes, including Evans, Krever and Mellor (eds), Australia’s Future Tax System: The Prospects After Henry (Thomson, 2010) and Evans and Krever (eds), Australian Business Tax Reform in Retrospect and Prospect (Thomson, 2009). Peter previously worked as a solicitor in indirect taxation in Melbourne and Sydney in the lead-up to the introduction of the GST in Australia in 2000.
A light lunch will be provided at 12-12.15pm, please register your attendance at the registration tab above.
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