Which statement is true regarding state income tax for multi-state corporations?

The statement that different states have varying apportionment rules is true because each state has its own method for determining how much of a multi-state corporation's income is taxable within its jurisdiction. Apportionment typically involves the use of a formula that considers factors such as sales, property, and payroll within the state compared to the corporation's total business activities. This means that multi-state corporations must navigate a complex landscape of rules and regulations where the tax obligations can differ significantly from one state to another.

Understanding these variations is crucial for compliance and tax planning. For example, some states might give more weight to sales in their apportionment formula, while others may prioritize property or payroll factors. Additionally, these rules can change over time, reflecting local economic conditions and policy priorities, making it essential for corporations operating in multiple states to stay informed about each state's specific apportionment methodologies.

The other statements do not accurately reflect the nature of state income taxation. For instance, not all states tax income equally; each state has its own tax rates and policies. Corporations cannot simply choose which state tax to follow as they must comply with the laws of each jurisdiction where they conduct business. Furthermore, state tax computations are not based solely on federal income; states often start with