Client is a S corporation that has activity in many states of picking up goods from one state and delivering to another state. Client has record of mileage driven for each pick up and delivery. Based on prelim review of state apportionment rules it seems that most states require state tax filing of the S corporation based on mileage driven in that state over total mileage. I would appreciate anyone with experience to comment on the correct way to report apportionment for trucking services
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My opinion is that the drivers are never in any state long enough to create a liability for S corp purposes. But that only applies to the drivers. The customer base may be coming from many states, even some states for which drivers never enter. From the standpoint of state "source income" there may be liability. Allocation of state income usually depends on a 3-factor formula - Investment, Payroll, and Sales.
There is also "IFTA" which is an allocation of gas taxes burned and paid in various states along the way. But that is for gas tax, and not for S corp taxes.
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