Legal Definitions - UDITPA

Definition: UDITPA stands for Uniform Division of Income for Tax Purposes Act. It is a model law that provides guidelines for how states should tax businesses that operate in multiple states.

For example, if a company has offices in three different states, UDITPA provides a formula for how each state should calculate the portion of the company's income that is subject to state taxes.

Another example is if a company sells products or services in multiple states, UDITPA provides guidance on how to allocate the income from those sales to each state for tax purposes.

These examples illustrate how UDITPA helps ensure that businesses are taxed fairly and consistently across different states.