Maryland Corporation Income Tax - Computing the Apportionment Factor

Multistate corporations are corporations that operate in more than one state and beyond the protection of 15 U.S.C. Section 381 (P.L. 86-272) of the Interstate Commerce Act. Multistate corporations operating in Maryland as a unitary business must allocate income using an apportionment formula.

Unistate corporations are those that operate in only one state, or operate in more than one state but the extent of the activity in the other states is within the protection of 15 U.S.C. Section 381 (P.L. 86-272). Unistate corporations subject to the Maryland income tax law may not apportion income.

Allocation means the assignment of income to a particular state. Apportionment means the allocation of income among the states by the use of a formula containing apportionment factors. For more information regarding the computation of apportionment factors, see Administrative Release No. 2: Interstate Commerce Act - Domestic and Foreign Corporations - Nexus Requirements - Apportionment of Corporate Net Income and Maryland Tax Regulation 03.04.03.