Some states that apply a "costs of performance" methodology to sourcing certain types of receipts may require that receipts be sourced entirely to the state if the income-producing activity is performed both in and outside of the state and a greater proportion of the income-producing activity is performed in the State than in any other state, based on costs of performance. 

The Synthes USA HQ, Inc. v. Commonwealth case highlighted how Pennsylvania applied its then-existing "costs of performance" test to create, practically speaking, a method of sourcing receipts that resembled market-based sourcing. How did Pennsylvania apply this?

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In the Synthes USA HQ Inc v Commonwealth case Pennsylvania applied its costs of per... View the full answer