State income tax apportionment is the method states use to divide a multi-state company's income, so each state taxes only the share of income considered earned within its own borders, rather than every state taxing the full amount.
States typically apportion income using a formula based on some combination of sales, payroll, and property located in that state, with most states now weighting sales most heavily or exclusively. A remote company with employees scattered across several states, and customers in even more, can end up with an apportionment calculation touching a dozen or more state returns.
This adds up quickly for a distributed startup: a fully remote team hired without much thought to geography can accidentally create tax filing obligations, and real apportioned tax liability, in far more states than the founders realized the company had any real connection to.
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