Abstract
Over the past 40 years, changes in the federal tax law and the development of new types of state authorized business entities have resulted in a massive shift in the federal tax reporting of business entities. Forty years ago, most businesses filed federal tax returns as C corporations. Now, business federal tax returns are predominantly filed as pass through entities; i.e., S corporations or partnerships. This shift has necessitated a greater focus by tax advisors and tax preparers on state tax compliance of multistate businesses operated as pass through entities and on state tax compliance of the owners of the pass through entities. The multitude of issues presented for state income tax compliance for multistate pass through entities and their owners and the practical problems created for these businesses and their owners are examined in this Article.