A recent Massachusetts decision called into question the dominant method for determining how to apportion a unitary group’s taxable income in combined filing states.
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The divide among combined reporting states using the “Joyce” or “Finnigan” method turns on whether each entity must have nexus with the state for their apportionment factors to be included in the combined group’s apportionment computation, used to determine how much of the business’s activity is taxable in the state.
Under Finnigan, the whole group is treated as the taxpayer, while Joyce treats each individual entity as the taxpayer. Blank Rome LLP partner Nicole Johnson keeps them straight by thinking of Finnigan as an Irish pub: “If you know one person in the bar, you’re friends with everybody.”
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Johnson said it’s no surprise states have jumped on the Finnigan bandwagon because it generally means more income is sourced to them.
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"Dueling State Approaches to Taxing Related Businesses: Explained," by Perry Cooper was published in Bloomberg Law on September 10, 2026.