Amends existing law to revise provisions for determining whether a multistate corporation's transactions are included in Idaho taxable income.

This bill involves multistate income tax. This bill is updating a method of measuring the sales factor for sales other than tangible personal property or services. The current law says that the sales are counted in Idaho if the income producing activity takes place in Idaho or if the greater portion of the "costs of performance" take place in Idaho. This bill updates that measurement to what is referred to as "market based" sourcing or counting the salesbasedonthelocationofthecustomer. Theinternethasmadedeterminingthelocationoftransactionsmore difficult to determine. Idaho is the only state in the greater western region still using the costs of performance method. This is a modernization for income tax comparable to the economic nexus laws passed as a result of the Supreme Court Wayfair case. Idaho uses a three-factor apportionment formula to measure the Idaho portion of the income tax liability for any taxpayers that do business in Idaho and at least one other state. Idaho's apportionment factor is the ratio of payroll, property and sales in Idaho compared to everywhere else. This is found in section 63-3027(r). The sales are double weighted to balance the investment of capital and wages with the market return of the sales. The company's taxable income is then multiplied by the percentage representing the business's Idaho presence. Almost all states that have an income tax use some variation of this method.