A Dozen States Puzzling Out How to Tax Foreign Income

States have struggled for two years to give consistent and clear guidance on whether—and how—they will tax a new federal category of foreign income, causing confusion for multinational businesses confronting this patchwork of rules.

But that could change this year.

As many as a dozen states are expected to roll out new guidance or pass legislation on how state tax obligations are affected by the 2017 federal tax law’s global intangible low-taxed income, or GILTI. States that are adopting GILTI—as well as those that aren’t—are expected to act, with urgency the highest in a handful of states that have failed ...