It is based solely on the sales of a company. Benefits companies with substantial Wisconsin Operations. Corporate taxpayers who are headquartered or have the majority of their facilities in a single-factor sales apportionment state will have a lower effective tax rate than businesses located in a three or four factor state and thus will have a better ability to compete and expand their businesses. Encourages Expansion in Wisconsin . A single sales factor encourages the location of manufacturing facilities as well as corporate, national and regional headquarters in a state .
Current law encourages moving jobs out of Wisconsin .
Conversely, by apportioning income to a state in direct proportion to the amount of property and payroll located in the state, the three factor formula imposes a tax penalty on businesses that choose to add jobs or expand their facilities within that state. In effect, including property and payroll in an apportionment formula transforms a state corporate income tax into a direct tax on the amount of property and payroll located within the state. Tax increases for Wisconsin companies operating in single factor states . Furthermore, Wisconsin s multi-state corporations are penalized in the states that have already passed the single sales factor formula. Most of the surrounding states have either fully adopted or are phasing in a single sales factor apportionment formula.