Compliance
Throwback Rule
Definition
The throwback rule is a state tax provision that requires a company to 'throw back' sales to a state where the company is taxable if the destination state would not tax those sales. This prevents income from escaping taxation by falling into a gap between states' apportionment rules. Not all states use this rule, making it a common source of errors in multi-state tax filings.
Let TaxScout.ai handle the complexity
AI-powered tax preparation that understands every term, form, and rule.
Request Early Access