The prevalence of post-pandemic remote working arrangements and increased interstate migration have upended existing personal income taxation regimes. For decades, the current paradigm proved to be an imperfect but workable means to determine which state has the prevailing claim to impose tax on a particular item of income. The individual’s state of residence has a residual claim to all the individual’s worldwide income, but defers to the state in which the income is derived if such a state is determinable. To that end, the state of residence typically provides a credit for income taxes paid on a source basis to other states. Fundamentally, source trumps residence in the context of personal income taxation.

The problem is that taxing jurisdictions can no longer readily determine the source of income or the individual’s state of residence within the existing legal constructs. Existing legal structures designed to tax employment income cannot cope with widespread remote working arrangements. The rise of the digital economy and independent contractor “gig work” allows individuals to shift the source of their income. At the same time, individuals are also shifting their state of residence from high-tax to low-tax states at historic rates. Increased interstate migration, particularly of high-net-worth individuals and profitable closely-held businesses, has allowed income to migrate with individuals. The result is a genuine threat of multiple taxation for individuals and significant revenue losses for taxing jurisdictions. The stakes are enormous, as personal income tax regimes account for approximately one-quarter of all state and local tax revenues.

The solution—formulary apportionment—is a concept with which states are very familiar. Although formulary apportionment has been the prevailing paradigm for multistate corporate income taxation for decades, state legislatures and the existing literature have largely and surprisingly failed to recognize the promise of formulary apportionment for multistate personal income taxation. This Article remedies that oversight.

Tokenization began a fundamental transformation of our laws of ownership, but this transformation is curbed by a lag in the laws of taxation. This Article provides the theory and doctrinal tools to mend this disconnect. Tokenization provides a method to prove and transfer ownership of valuable assets such as art, real property, and equity interests in all types of entities. The tokenization process creates a nominal token that represents the legal ownership rights in the underlying asset. The token, and thus the ownership of the underlying asset, can then be verified and transferred in a process that may be more efficient than doing so with the underlying asset directly.

Blockchain-based tokenization promises to increase efficiency exponentially, which will reduce transaction costs and allow for greater market participation. Blockchain-based tokenization also inherently obscures ownership and transfers of the underlying asset, which may produce significant tax benefits for the asset owner but erode the state and local tax base. State and local governments impose taxes on the ownership and transfer of property. These taxes typically apply only to tangible property, not intangible property. If ownership of tangible property is transferred via an intangible token, such as a blockchain-based non-fungible token (“NFT”), significant transaction taxes may be avoided. In addition, determining which taxing jurisdiction has the statutory and constitutional basis to impose tax on the tokenized transaction is problematic.

This Article answers the crucial tax questions that arise with blockchain-based asset tokenization. First, this Article examines foundational tokenization principles, which implicate many fields of law. Next, this Article analyzes blockchain-based tokenization in several important contexts, focusing on the tax implications of each. In conclusion, this Article resolves jurisdictional and constitutional challenges, and provides a normative approach for taxing blockchain-based tokenized assets.

In October 1998, Congress enacted the Internet Tax Freedom Act (ITFA), a temporary three-year “moratorium” on the enactment of new state and local “taxes on Internet access” and on “multiple or discriminatory taxes on electronic commerce.” After extending the act temporarily several times, Congress, in 2016, finally and controversially struck the language temporarily extending the act, thereby making it permanent.

With its idiosyncratic legislative history and statutory language, as well as the recent attention it has received in connection with legal challenges to digital services and analogous taxes, we thought it would be appropriate to commemorate ITFA’s 25th birthday by reviewing the act and the litigation it has spawned and to consider whether it is “fit for service” in today’s digital economy.

The binary legislative choice between state and federal regulation of a firm’s internal affairs is deeply entrenched in the existing literature and policy discussions. Alas, this regulatory menu contains a false and distortive dichotomy. The state-federal dichotomy is false because multistate formation and regulation of business entities are possible as well. This dichotomy is distortive because it deprives policymakers of the advantages of multistate corporations and other business entities. In this Article, we demonstrate that a multistate business entities regime can resolve multiple predicaments that presently bring about unfairness and inefficiencies in both business entities law and business entities taxation.

A multistate business entity regime promises to be beneficial for both the participating states and the business entities themselves. For example, by choosing to co-compete, states that have so far lost in the market for corporate charters would be able to generate—and divide among themselves—substantial business and tax revenues by offering the corporations formed under their regime unique tax and corporate law benefits. In this way, for example, a “tri-state” co-op, offered by New York, Connecticut, and New Jersey, could compete with Delaware; and a “rust belt” coalition could retain industry charters within its multistate jurisdiction.

The hitherto unnoticed potential for a multistate entity regime aligns with the Framers’ vision for state cooperation under the Constitution’s Compact Clause. Further yet, setting up this regime would vastly improve the functioning of the market for both corporate charters and other business entities. This regime would allow states to vigorously compete for both managers and investors, boost stakeholder advocacy, and accomplish ESG goals to the benefit of their constituents.

The movement of people and the movement of money are often discrete. As such, governments can address the effects of each separately. Because residence provides a general jurisdictional basis for state personal income taxation, however, money often moves with people. States must disentangle the two to prevent tax base erosion and improve distributional equity, particularly with many highnet-worth individuals migrating to states with more favorable tax regimes. A state exit tax may be the answer.

This Article begins by examining exit tax theory and advancing novel applications of theories that support subnational exit taxation, both domestically and internationally. With a robust theoretical and technical foundation, this Article turns to state and local exit tax design. This discussion examines constitutional constraints to address specific tax base migration challenges focusing on the justifications, distributional impact, and optimal exit tax design features to address each situation.

If a state has a solid theoretical foundation and incorporates proper design principles, as this Article provides, an exit tax can effectively mitigate tax base migration while aligning with prevailing policy goals and avoiding constitutional infirmities.

A recent decision of the Oregon Tax Court suggests that it may be premature to dismiss the challenging questions raised by the retroactive application of Wayfair as entirely hypothetical. Accordingly, after providing an overview of the case law governing retroactive application of Supreme Court state tax decisions repudiating preexisting constitutional doctrine, we examine the Oregon Tax Court’s opinion in Global Hookah Distributors Inc. v. Department of Revenue, which addressed the question whether Wayfair applied retroactively to the state’s tobacco products tax.

States are rekindling the trend of broad constitutional amendments that require supermajority approval to create or increase taxes. This trend may inadvertently harm states' already precarious fiscal footing, particularly with several new imminent expenditure demands. States can minimize negative economic consequences, however, through proper supermajority requirement design.

This article makes three contributions. First, it examines broad constitutional tax supermajority requirements' history, asserted justifications, and effectiveness. This examination concludes that the motivations underlying the first and second supermajority waves differ importantly from those underlying the possible third wave. Recognizing this novel motivation-signaling low-tax competitive advantage-allows this article to present optimal supermajority provision design principles.

Second, this article investigates several new sources that can generate immense tax revenue for states, but that will likely be obstructed by tax supermajority provisions if not designed properly. This article also identifies several expenditure demands that are unlikely to be satisfied without new or increased taxes.

Finally, this article presents tax supermajority requirement design principles that achieve a strong low-tax signaling function while allowing flexibility to maintain a low-tax competitive advantage. Fundamentally, the constitutional tax supermajority requirement should expressly encompass personal income tax, business taxes, and fees, while excluding transaction taxes. If a state decides to pursue a broad tax supermajority requirement, these design principles will best position a state to attract businesses and wealthy individuals while also achieving fiscal stability.

With Missouri’s adoption of platform legislation in May 2021, every state with a sales tax has now adopted marketplace platform legislation. This article provides an updated and, for the moment at least, complete description of state marketplace platform legislation.

Existing tax regimes fail to tax digital services appropriately. Digital services based on extracting and monetizing user data-most notably digital advertising-are particularly problematic because tax regimes do not adequately account for the enormous value derived from user data.

Internationally, taxing jurisdictions have recognized these failures and commenced a controversial push toward new digital services taxes, or DSTs. Subnational taxing jurisdictions in the United States face the same issues and are searching for solutions.

This Article begins by examining the motivations and justifications for digital service taxation at both the international and subnational levels. These justifications center on antiquated tax regimes that do not sufficiently capture profit from new business models, particularly business models that rely on valuable data extracted from users in the taxing jurisdiction.

Next, this Article presents options for subnational digital service taxation. These options range from slightly modified existing tax regimes to novel approaches that may more appropriately tax digital services, specifically those services that extract and monetize user data. This Article also analyzes the constitutional, federal preemption, and sourcing challenges facing subnational digital services taxes.

This Article concludes by examining how subnational taxing jurisdictions may most effectively tax digital services. Although states have started to embrace digital advertising taxes modeled after European digital services taxes, these taxes are narrow and susceptible to challenge. Subnational jurisdictions have several better options, including publicly traded stock-based taxes and data mining taxes.