Unitary Taxation: An Analysis of State Taxation of Multijurisdictional Corporations in Nebraska

The purpose of this article is to outline the basic mechanics of unitary taxation; to explore the options available to the states in taxing multijurisdictional corporations; to investigate the constitutional restrictions on the ability to tax unitary business; and to argue that, if uniformity among the states cannot be achieved, then at best internal uniformity in the way a particular state\u27s formula is applied should be maintained. To achieve these objectives, this article: (1) analyzes state taxation of multijurisdictional corporations in general; and (2) analyzes Nebraska\u27s taxation of multijurisdictional corporations, focusing on (a) the statutory development in Nebraska, (b) the Kellogg Company case, (c) the effect of Kellogg Company, and (d) the legislative response to Kellogg Company. An analysis of state taxation in general and state taxation of multijurisdictional corporations in particular is exceedingly complex, and Nebraska\u27s taxation methods are no exception. As a result of the complexity, an overview of general state taxation of multijurisdictional corporations is helpful in understanding how Nebraska taxes these businesses