There are currently two methods states generally use to tax the income of multistate multi-corporate businesses. One is separate accounting, and the other is the unitary method. Virginia currently uses separate accounting to tax such income. Under separate accounting businesses have greater ability to avoid state income tax with (1) their choice of corporate organization (branches or affiliates) and filing methods, and (2) transfer price manipulations. The objectives of the research were to (1) measure the incentive provided multistate businesses to utilize corporate organization and filing methods as a tax planning tool, and (2) measure the extent to which current Virginia law helps multistate businesses to avoid tax in Virginia and other states. Computer models were developed to compute the total state tax liability of a hypothetical representative multistate business which operated in Virginia and two other states. The models were utilized to compute the Virginia and total state tax for the business in 1,053 different situations. To measure the incentive provided multistate businesses to utilize corporate organization and filing methods as a tax planning tool, a comparison was made of the state tax liability of a business which made elections that minimized its tax with the tax liability of a similar business which made elections that maximized its tax. The tax avoidable under current Virginia law with corporate organization and filing method planning was measured by comparing the business's minimized tax under current law with its minimized tax under the assumption that Virginia utilized the unitary method. The effectiveness of current Virginia law in limiting the ability of businesses to use transfer price manipulations to reduce their state tax liabilities was measured by comparing the effects of a given transfer price manipulation between current law and the unitary method. The results of the analyses show that businesses have a clear incentive to utilize corporate organization and filing method planning, and that current Virginia law makes a substantial contribution to the ability of businesses to avoid state income tax. / Ph. D.