Many states require corporations that produce and sell goods to pay state corporate income tax. The amount of tax paid is based on the portion of their profits that can be attributed to the various states in which they conduct business. Most state and local tax practitioners are well aware that if a taxpayer has income from only one state, it is not permitted to apportion its income and is subject to tax on all of its income in that state. Said differently, taxpayers are permitted to apportion their income only if they are taxable in more than one state. For most large corporations, operating in multiple states is a given and there is no question that they will be able to apportion their income across these states. For small or midsize businesses, the right to apportion may become an option as the business expands. Determining whether it is desirable from a tax standpoint to establish the right to apportion can be more difficult than it initially sounds.