The document summarizes the results of a survey of corporate tax directors on state tax issues. It finds that California and New York are viewed as having the least fair and predictable tax environments due to their aggressive pursuit of tax revenue through tactics like asserting nexus and discretionary authority. States are increasingly looking to tax out-of-state businesses through economic nexus rules and by taxing a higher percentage of revenues from sales. The sourcing of taxable income from services is also an ongoing challenge and area of litigation as states disagree on the cost of performance vs. market-based approaches.