Multistate Tax Commission

News

Glenn Hegar, Comptroller of Public Accounts of the State of Texas v. Texas Entertainment Association, Inc.

On April 15, the MTC filed an amicus brief on petition for certiorari in the United States Supreme Court in the case of Glenn Hegar, Comptroller of Public Accounts of the State of Texas v. Texas Entertainment Association, Inc. The issue in the case is how to distinguish taxes from fees under the Tax Injunction Act (TIA). The case concerns the Texas Sexually Oriented Business Fee and whether, regardless of its name, it should be treated as a tax for purposes of the TIA, thus denying the federal courts jurisdiction. The Texas petition highlights the current split between the federal circuits and why the Fifth Circuit analysis is an outlier. The MTC brief supports Texas’s petition for certiorari and argues in favor of the Court granting the petition to implement a uniform interpretation of the TIA that emphasizes state tax sovereignty and results in a narrow approach to granting jurisdiction to the federal courts under the Act.

VAS Holdings v. Commonwealth

The question of whether states can tax a non-resident investors on the capital gain they receive from selling their interests in an LLC operating within taxing state is currently under consideration by the Massachusetts Supreme Judicial Court, in the appeal of VAS Holdings and Investments LLC v. Commissioner of Revenue , SJC No. 13139. While that court considers the matter, tax practitioners have not been hesitant in expressing their belief that the states’ authority to tax the gain on a source basis depends on the non-resident investor having a “unitary business” relationship to the underlying investment. On February 17 and 18 of this year Bloomberg Law’s Daily Tax Report printed a two-part response prepared by the Commission’s legal staff to one such article that had previously appeared in the Daily Tax Report.

The Commission’s legal staff argues that there is no recognized constitutional basis to differentiate between a state’s admitted authority to tax non-resident owners on distributive share income derived from an LLC’s activities in the state and taxation of capital gains arising from the sale of the owners’ interests in that same LLC. A decision is expected in the VAS Holdings appeal in April of this year, although that likely will not be the final word on the issue.

Quad Graphics, Inc. v. North Carolina Department of Revenue

The Multistate Tax Commission has filed an amicus brief in support of the North Carolina Department of Revenue’s appeal to the North Carolina Supreme Court in Quad Graphics, Inc. v. North Carolina Department of Revenue , Docket No. 407A21, of the North Carolina Business Court’s dismissal for a commerce clause violation of the Department’s sales tax assessment against the taxpayer on its sales of printed material delivered to North Carolina addresses provided to the taxpayer by its customers. To read the amicus brief, click the "Read More" button below.

VAS Holdings & Investments LLC v. Commissioner of Revenue

The Multistate Tax Commission has filed an amicus brief in the case of VAS Holdings and Investments LLC v. Commissioner of Revenue , Massachusetts Supreme Judicial Court No. SJC-13139. At issue in the case is whether Massachusetts had the statutory and constitutional authority to impose its income tax on the capital gain income recognized by an out of state investor on the sale of its ownership interest in a Massachusetts’-based LLC. The taxpayer concedes that the state had sufficient “nexus” to impose tax on its income derived from operations of the LLC within the state but argues that the absence of a unitary business relationship between the out of state owner and the in-state LLC precludes taxation of capital gain income. To read the amicus brief, click the "Read More" button below.

Santa Fe Natural Tobacco Co. v. Dept. of Revenue

The Multistate Tax Commission has filed an amicus brief with the Oregon Tax Court in Santa Fe Natural Tobacco Co. v. Dept. of Revenue. This case considers whether in-state activities conducted by an independent contractor pursuant to a contract with an out-of-state seller negates the seller’s P.L. 86-272 income tax immunity. The Commission’s brief, filed in support of the Oregon Department of Revenue, sets forth the legislative history of P.L. 86-272 and Congress’s narrow intent when enacting the statute. The brief also describes U.S. Supreme Court preemption jurisprudence, which provides that federal preemptions should be narrowly construed and that courts should not interpret federal statutes to preempt state taxing powers unless that is the clear and manifest purpose of Congress. You can read the brief by clicking here .

Mobile Workforce Proposals – A Comparison – November 2021 Update

In 2011, the MTC developed model legislation addressing the issue of workers temporarily in the state for short time-periods (“mobile workers”). This was a response to federal legislation that would have preempted state law and which contained provisions that would have created administrative problems for the states. The Council On State Taxation (COST), long a proponent of this federal legislation, has developed a draft state legislative proposal which contains provisions similar to current federal proposals. During the 2021 state legislative sessions, states have considered, and in some cases passed, bills addressing mobile workers. MTC staff has prepared analysis and a detailed comparison of the MTC model, the COST draft, and the latest federal bill from the current 117th Congress, which shows the significant differences. The Commission has recommended that states wanting to address this issue consider the MTC model. Click here , to access the analysis.

The Commission has Approved Two Uniformity Proposals for Recommendation to the States

The first proposal approved by the Commission is an alternative Model Statute for Combined Reporting following the Finnigan method. This is the method that states are moving toward—which treats the unitary group as a single taxpayer.

The second proposal includes revisions to the Statement Concerning Practices of the Multistate Tax Commission and Supporting States Under Public Law 86-272. These revisions address activities conducted via the Internet. The revised statement is available here.

Anatomy of a Domestic Tax Shelter

Tax Analysts published an article by MTC Senior Counsel Bruce Fort in its May 17, 2021 publications Tax Notes State, Tax Notes Federal and Tax Notes International entitled, “Anatomy of a Domestic Tax Shelter” regarding the use of so-called 80/20 companies as a means to artificially shift profits to non-taxed entities. The article describes the genesis of the domestic 80/20 company exclusion from the states’ water’s edge combined reporting regimes in the 1980’s, when states moved away from world-wide combined reporting in response to threatened federal preemption. Currently 16 states exclude U.S. companies with predominately foreign property and payroll factors from their combined reports.

To read the article, click the "Read More" button below.

An Insider’s View of the MTC’s P.L. 86-272 Project

In the fall of 2018, the MTC’s Uniformity Committee tasked a work group consisting of representatives from a dozen states to update the “Statement Concerning Practices of the Multistate Tax Commission and Signatory States Under Public Law 86-272.” The Statement was last revised in 2001.

In this article, Brian Hamer, MTC counsel, describes the proposed revisions to the Statement and the path that the work group pursued to reach the decisions they made. He also responds to criticisms that have been raised to the proposed revisions and explains why those criticisms are not well founded.

The Commission will consider adopting the proposed revisions for recommendation to the states at its 2021 annual meeting in August. To read the article, click the ‘Read More’ button below.

Noell Industries, Inc. v. Idaho State Tax Commission

The Multistate Tax Commission has filed an amicus brief urging the U.S. Supreme Court to review the Idaho Supreme Court's decision in Noell Industries, Inc. v. Idaho State Tax Commission, 470 P.3d 1176 (Idaho 2020). In its decision, the Idaho Supreme Court held that Idaho could not tax a holding company on any portion of its gain from the sale of a multistate business that had operated in that state for almost two decades. In its amicus brief, the Commission pointed out that the U.S. Supreme Court has never considered the application of the unitary business principle to a business enterprise that includes a holding company, resulting in a gap in Due Process Clause jurisprudence, and that the Idaho Supreme Court’s decision contributes to a growing conflict among state courts and administrative tribunals.

MTC Responds to OECD Public Consultation Document

The Multistate Tax Commission responded to the public consultation document that asks for comment on the Organisation for Economic Co-operation and Development (OECD) (2020), Tax Challenges Arising from Digitalisation – Report on Pillar One Blueprint: Item III - the nexus standard, and Item IV – the revenue sourcing rules. The MTC has extensive experience with both nexus and sourcing issues through our uniformity efforts and this submission — masterfully prepared by Uniformity Counsel Helen Hecht — provides the OECD a summary of that experience along with information on the approach that the MTC has recommended to its members.

Georgetown University Law Center Partners with MTC

Georgetown Law and the Multistate Tax Commission (“MTC”) have partnered to provide a 20 percent tuition discount to state and local tax government attorneys and qualified non-attorney tax professionals who matriculate in the 2021-2022 LL.M., MSL, or SALT Certificate Distance Learning programs.

Foreign Commerce Clause Discrimination: Revisiting Kraft after Wayfair

In his article published earlier this year in Baylor Law Review, Michael Fatale explores the import of the U.S. Supreme Court’s decision in Kraft General Foods, Inc., v. Iowa Department of Revenue and Finance in light of the federal tax changes popularly referred to as the Tax Cuts and Jobs Act (“TCJA”). The TCJA extended the definition of federal taxable income to so-called “deemed repatriation income” and global intangible low-taxed income or “GILTI.” Some have claimed that Kraft restricts the states with respect to taxing this income. Fatale’s article posits that these readings of Kraft are incorrect, that Kraft was incorrectly decided, and that it is overdue for judicial reconsideration as Quill was in Wayfair.

National Geographic — Still Relevant After Wayfair?

In this article, Richard Cram, MTC director of the National Nexus Program, argues that the decision in South Dakota v. Wayfair, which overturned the physical presence requirement in Quill v. North Dakota and National Bellas Hess v. Illinois, did not disturb the holding in National Geographic Society v. California that a state may impose its use tax collection obligation on an out-of-state seller that has physical presence in that state, even when such physical presence is unrelated to the sales activity on which the use tax collection obligation is imposed. National Geographic remains good law in determining nexus when the out-of-state seller’s economic presence falls below the state’s economic nexus threshold.

Wayfair Implementation – Marketplace Facilitator Collection Project White Paper

The Uniformity Committee established the work group on Wayfair Implementation and Marketplace Facilitator Collection project as a project to address issues concerning the states implementation of the U.S. Supreme Court’s Wayfair decision, giving states the authority to impose sales and use taxes on remote sellers, and enacting requirements for marketplace facilitators to collect and remit those taxes on marketplace sales. The work group’s goal has been to develop recommendations for maximizing compliance while minimizing the burden on remote sellers, marketplace facilitators and marketplace sellers. The work group has produced a white paper (which we will continue to update, periodically) which is available here.

Wayfair, What’s Fair, and Undue Burden

Michael Fatale, deputy general counsel at the Massachusetts Department of Revenue and adjunct professor at Boston College Law School, discusses the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018). After revisiting the Supreme Court’s prior holdings in and the history of National Bellas Hess, Inc. v. Dep’t of Rev. of Illinois (1967) and Quill Corp. v. North Dakota (1992), Fatale then turns to the history and text of the South Dakota statute at issue in Wayfair. Finally, he considers the legal theories evaluated by the Supreme Court in Wayfair — in particular the notions of discrimination, due process, and undue burden. The article was originally published in the Chapman Law Review and is made available here by permission.

Fifty years of MTC Uniformity Efforts

The Not-So-Obvious Lessons
Like uniformity itself, the efforts to achieve uniformity also serve a greater purpose. This article by Helen Hecht, MTC general counsel, explains why.

States Should Embrace GILTI or Pursue an Alternative Path to Fairness

In this article, Brian Hamer, MTC counsel, argues for states either to follow the lead of the federal government and tax Global Intangible Low Taxed Income (GILTI) or to adopt an alternative approach to address international income shifting by global enterprises. The article describes the federal tax on GILTI which is part of the Tax Cuts and Jobs Act, the reasons that motivated Congress to act and which equally to states, the magnitude of global income shifting by U.S. corporations and the adverse impact on state tax bases, the inadequacy of traditional tools to address this problem, and the key legal issues that relate to state taxation of GILTI.

Current Economic Conditions

Elliott Dubin and intern Emma Snyder of the MTC, using data from a number of sources, provides a snapshot of current economic condition of the states; and, a forecast of economic conditions in the near future. Needless to say, the current economic conditions of the states vary widely; and, even short-term predictions of the economy are not always precise.

MTC New Uniformity Model - Partnership Project

At a special Commission meeting on January 24th, 2019, the Multistate Tax Commission adopted the Model Uniform Statute for Reporting Adjustments to Federal Taxable Income and Federal Partnership Audit Adjustments as a uniformity recommendation to the states.

Steiner v. Utah Tax Commission

On November 26, 2018, the MTC filed an amicus brief in the Utah Supreme Court on behalf of the Utah Tax Commission in Steiner v. Utah Tax Commission. In its brief, the MTC explained that Utah’s individual income tax comports with both the dormant interstate Commerce Clause and the dormant foreign Commerce Clause of the U.S. Constitution, notwithstanding the fact that Utah’s tax does not allow its residents to apportion their income and does not provide a credit for national and substantial taxes their residents pay to foreign jurisdictions. Utah generally taxes 100% of residents’ income and provides a credit for taxes paid to other U.S. states. Virtually all state broad-based individual income taxes around the country are structured in relevant respects like the Utah tax.

Alabama v. CSX

On November 9, 2018, the MTC filed an amicus brief in the United States Supreme Court supporting Alabama’s petition for writ of certiorari in Alabama v. CSX. The MTC encouraged the court to grant the petition in order to clarify its previous holdings in the case, which involves the question of whether rail carriers may be subjected to a fuel tax that is parallel but not identical to those imposed on motor and water carriers. CSX has argued that these taxes discriminate against rail carriers in violation of the 4-R act, 49 U.S.C. § 11501(b)(4). In its prior holdings in this case, the Court determined that the scope of the 4-R Act is extremely broad—encompassing all manner of taxes and tax issues and potentially diverse comparison classes that may give rise to claims of discrimination.

ABA Tax Section Reports on Implications on State and Local Taxes from the Federal Tax Cuts and Jobs Act of 2017

On November 9, 2018, the American Bar Association’s Section of Taxation submitted a series of reports on the implications on state and local taxes from the Federal Tax Cuts and Jobs Act of 2017. The reports were prepared by the Tax Section’s State and Local Taxes Committee at the request of MTC Executive Director Greg Matson.

You can access the report by clicking here.

Washington v. Cougar Den

On August 16, 2018, the Multistate Tax Commission and Federation of Tax Administrators jointly filed an amicus brief in the U.S. Supreme Court in Washington v. Cougar Den. On its surface, the case concerns the rules of construction applicable to Native American treaties. But the MTC and FTA filed this brief to emphasize the potential effect an adverse decision could have on state fuel and tobacco taxes. The amici explained the interconnected nature of the administration and enforcement of many state taxes and requested greater clarity from the Supreme Court about the treaty provision at issue.

No Shade for Cloud Computing Income Under P.L. 86-272

Richard L. Cram is the director of the Multistate Tax Commission’s National Nexus Program, which offers a multistate voluntary disclosure program. He thanks Michael Fatale, Brian Hamer, and Helen Hecht for their helpful suggestions concerning this article. This article states the author’s own views, which are not necessarily those of the MTC.

Franchise Tax Board v. Hyatt

In the case of Franchise Tax Board v. Hyatt, the Commission, along with the National Governors Association and the National Conference of State Legislatures, have filed an amicus brief in support of the California Franchise Tax Board (FTB), asking that the U.S. Supreme Court overrule the 1979 case of Nevada v. Hall. In Hall, the Court ruled for the first time that states and their governmental agencies do not have sovereign immunity in the courts of their sister states. In Hyatt, an individual, who had moved from California to Nevada, sued the FTB alleging that its auditors had committed torts.

Government Contributions to Capital—The Known and the Unknown

Helen Hecht and Lila Disque of the MTC are featured in the Journal of Multistate Taxation and Incentives. The TCJA treats governmental nonshareholder corporate contributions to capital as taxable income for the first time since the federal income tax was imposed.

Current Economic Conditions

Elliott Dubin and former policy research intern Parker Armstrong of the MTC, using data from a number of sources, provides a snapshot of current economic condition of the states; and, a forecast of economic conditions in the near future. Needless to say, the current economic conditions of the states vary widely; and, even short-term predictions of the economy are not always precise.

Trends in State and Local Finances: 1967 to 2017

Elliott Dubin and former policy research intern Parker Armstrong of the MTC examines longer-term trends in state and local government fiscal conditions and highlights the changes in spending and revenues over a 50-plus year period.

MTC Files Amicus Brief in FTB v. Hyatt

The Commission has filed an amicus brief supporting the California Franchise Tax Board in its petition to the U.S. Supreme Court in the Hyatt case. The petition asks the Court to overturn an earlier decision, Nevada v. Hall, that permits state tax agencies and officials to be sued in the courts of another state. If the Court grants the FTB’s petition, it will be the third time the Court has considered various issues in this case.

MTC Files Amicus Brief on the Merits in South Dakota Wayfair Case

The Commission has filed an amicus brief in support of South Dakota in its Supreme Court case seeking to overturn Quill v. North Dakota. The MTC’s brief in South Dakota v. Wayfair asks the court to overturn the physical presence standard under its dormant commerce clause jurisprudence, arguing that physical presence has little if anything to do with the relevant burdens analysis and is also a poor standard for achieving predictable consistent results outside of the traditional mail-order context.

The Paralegal’s Perspective and Tax Law: How do I know if I have nexus?

Michelle Lewis of the MTC Voluntary Disclosure Program is featured in the National Capital Area Paralegal Association (NCAPA) OnPoint newsletter. Towards the end of the year, many businesses start to think about what their tax liabilities are, settling those, and filing tax returns, especially when multiple states are involved. The most common question businesses seem to have is “Do I owe tax in the state?” This question can usually lead into, “Do I have nexus?” Many may also wonder “What is nexus and how do I know if I have it?” These are shared questions that businesses all over the country want answered. The good news is that it is really not that difficult to answer!

MTC Mourns the Loss of First Executive Director, Gene Corrigan

The Commission was saddened by news of the death of Eugene F. Corrigan, the MTC’s very first executive director, one month shy of his 91^st birthday. In July, he impressed us all with his charm and remembrances while with us in Louisville for our 50th anniversary.

Report on the National Nexus Program Online-Marketplace Seller Voluntary Disclosure Initiative

The Multistate Tax Commission’s National Nexus Program (NNP) was created by and is composed of member states. One of the chief stated purposes of the NNP is to encourage and facilitate compliance with nexus law by those engaged in interstate commerce. To further this purpose, the NNP offers a multi-state voluntary disclosure program in which non-filers that have tax liabilities arising from potentially misconstrued nexus laws may, through a confidential and substantially uniform process, and a single point of contact, register and begin paying taxes, while limiting the back periods for which tax liability will be assessed and avoiding penalties.

Celebrating 50 Years

The Multistate Tax Commission marks its 50th anniversary this summer. In celebration of the Commission’s five decades, we will highlight notable happenings over the years during 2017.

December 2016

At the end of December 2016, a long-awaited decision out of California’s Supreme Court held that the state legislature did not have to withdraw from the Multistate Tax Compact in order to amend the compact’s apportionment formula. But by then, California’s legislature, having anticipated a loss in the appellate court below, had already withdrawn, ending the state’s almost four-decades-long membership. A number of commentators predicted the MTC could not survive without California’s support. But, as Mark Twain famously remarked about mistaken reports of his own death, reports of the Commission’s demise were also “greatly exaggerated.” Nor has the so-called “compact litigation,” also known as the “Gillette litigation” because of the California case, turned out the way many predicted, thanks in part to the ability of the states and the Commission to jointly mount a skillful defense.

You can read more events highlighted in previous weeks in chronological order using the link below.

MTC Files Brief in Support of South Dakota’s Petition in Wayfair Case

The Commission has filed an amicus brief in support of South Dakota in its Supreme Court petition in the Wayfair case seeking to overturn Quill v. North Dakota. The brief asks the court to take the case in order to re-examine the physical presence standard under its dormant commerce clause jurisprudence, arguing that physical presence has little if anything to do with the relevant burdens analysis and is also a poor standard for achieving predictable consistent results outside of the traditional mail-order context. Because it is so unsuitable to distinguishing the line between constitutionally permissible burdens, and burdens that may be considered “undue,” it cannot adequately protect states’ sovereign authority to impose taxes.

MTC Files Amicus Brief in Graphic Packaging v. Hegar

On August 30, 2017, the Multistate Tax Commission filed an amicus brief in Graphic Packaging v. Hegar, a Compact case that is currently pending in the Texas Supreme Court. In its brief, the Commission described the nature and history of the Compact and its membership, and explained why a state need not withdraw from the Compact in order to repeal the Compact’s apportionment election. Oral arguments in the case took place on September 13, 2017.

Current Economic Condition of the States

Henry Wearmouth, former MTC Policy Research Intern, using data from a number of sources, provides a snapshot of current economic condition of the states; and, a forecast of economic conditions in the near future. Needless to say, the current economic conditions of the states vary widely; and, even short-term predictions of the economy are not always precise.

MTC Files Amicus Brief with Commissioner v. Associated Bank

On July 20, 2017, the MTC filed an amicus brief in Commissioner v. Associated Bank, a case pending before the Minnesota Supreme Court. The MTC supported Minnesota’s contention that, because the income in question was generated entirely by the activities of the parent company, a financial institution, the commissioner should disregard an LLC’s business structure and apply the alternative apportionment formula used for financial institutions.

Partnership Taxation - A State Tax Administrator's Perspective

Helen Hecht and Lila Disque of the MTC are featured in the Journal of Multistate Taxation and Incentives. Entity-level assessment will require states to consider the implications with respect to nexus, apportionment, and conformity.

MTC Files Amicus Brief with 11th Circuit Court of Appeals

On June 30, 2017, the Commission filed an amicus brief with the 11th Circuit Court of Appeals in CSX Transportation, Inc. v. Alabama Dept. of Revenue, et al. supporting Alabama’s contention that it does not violate the 4-R Act when it imposes sales and use tax on rail carriers’ diesel purchases while exempting those who use roads or waterways for transit. Based on its language, the Commission concluded that the 4-R Act does not require the state to spend fuel tax revenues in a specific manner, and that CSX must show harm in order to seek a remedy under the act.

MTC Files Amicus Brief with Utah Supreme Court

On May 8, 2017, the Multistate Tax Commission filed an amicus brief in the Utah Supreme Court regarding Utah State Tax Commission v. See’s Candies, Inc. The case involved the extent to which a tax administrator may use its discretionary authority to disallow deductions for royalties paid to a related insurance company.

State Corporate Income Taxes and the Effect on European Taxes

The European Commission is pursuing its plan to introduce a common tax system for companies doing business across the European Union. That system would simplify the tax base calculations for thousands of EU companies, which now must comply with 28 different sets of tax rules throughout the European Union. The proposal would establish a common tax base as a first phase, and in a second phase, would require companies to consolidate their EU operations into a single corporate entity. The companies would then distribute the tax base throughout their operations in the European Union using a formula based on the location of the company’s assets, employees, and sales.

Commission Files Brief in Supreme Court DMA v. Brohl

On November 7, the Commission filed an amicus brief in the United States Supreme Court, supporting Colorado’s cross-petition in DMA v. Brohl. The Direct Marketing Association (DMA) is appealing the Tenth Circuit’s decision that Colorado’s sales and use tax notice and reporting statute did not discriminate against interstate commerce. The Commission brief supports Colorado’s position that, if the court grants review based on DMA’s discrimination claim, it should also take the opportunity to reconsider Quill v. North Dakota. This case is unusually well-suited for this purpose because Quill has already been invoked and analyzed extensively in the lower court proceedings; the current situation demonstrates the convoluted efforts necessary to collect use tax; and the case is unlikely to give rise to retroactive tax liability.

Elliott Dubin and former policy research intern Trevor Ahouse of the MTC are featured in the Journal of Multistate Taxation and Incentives. Trevor Ahouse is a student at Bloomsburg University. The report examines longer-term trends in state and local government fiscal conditions and highlights the changes in spending and revenues over a 50-plus year period.

On August 25th, U.S. Rep. Bob Goodlatte released a draft of federal legislation, the Online Sales Simplification Act of 2016, that would require remote sellers, as defined, to collect and report sales tax to a single state where the seller’s affiliated group has its greatest number of employees (the so called origin state), using that state’s tax base, but using the destination state’s rate. A copy of the draft legislation is available by clicking here

MTC Files Amicus Brief in Health Net v. Oregon Dep’t of Revenue

On June 16, the MTC filed an amicus brief in Health Net, which is currently pending in the Oregon Supreme Court on direct appeal from Oregon's Tax Court. The case arises out of the same issue as Gillette: whether the state must allow the taxpayer to use the income tax apportionment election contained in Article III of the Multistate Tax Compact, or whether the state may require apportionment via its own formula.

In Gillette, the California Supreme Court ruled unanimously in favor of the state; Oregon's Tax Court did the same. The MTC filed its brief to clarify the nature of the Compact, as it did in Gillette and several other pending cases.

DMA v. Brohl—Is It Time to Stop Fighting the Last War?

Helen Hecht and Lila Disque of the MTC propose that rather than continuing the battle to persuade Congress or the Supreme Court to remove restraints on the states’ existing tax collection mechanism, states might consider an alternative mechanism that makes use of 21st century technology.

DMA and the Overture to Overturn Quill

Helen Hecht and Lila Disque of the MTC consider Justice Kennedy’s concurrence in the Direct Marketing Association case inviting states to bring a challenge to Quill, and the general problems in mounting such a test case.

A Conversation with Greg Matson—Executive Director of the Multistate Tax Commission

In her regular column, KPMG Corner, for the May 2016 edition of the Journal of Multistate Taxation and Incentives (Thomson Reuters/Tax & Accounting), Shirley Sicilian, managing director in the State and Local Tax group of the Washington National Tax practice of KPMG LLP, interviews Greg Matson to discuss his vision for the Commission and his perspective on current multi-state tax issues, as well as a bit of personal reflection.

MTC is featured in State Tax Notes

State Tax Notes recognizes the Multistate Tax Commission for its influence on state tax policy and practice in 2015.

"The MTC had a blockbuster year, despite having a full plate and a thin staff," said University of Connecticut law professor Richard Pomp, State Tax Notes' 2013 Person of the Year for his work as hearing officer on the MTC's proposed revisions to the Uniform Division of Income for Tax Purposes Act.

California Supreme Court Vindicates California and Commission in Gillette

On December 31, 2015, the California Supreme Court ruled unanimously that California was not barred from disabling the corporate income tax apportionment election contained in Article III of the Multistate Tax Compact and mandating that all taxpayers apportion their income to California by double-weighing the sales factor.

NH Department of Revenue Administration Launches One-Time Tax Amnesty Program

People fall behind on their taxes - no one is perfect. However, you have the opportunity to do what’s right for New Hampshire and free yourself from outstanding taxes.

Here’s how: Between now and February 15, 2016, individuals and businesses have the opportunity to pay any outstanding taxes without penalty and with 50% of accrued interest through the New Hampshire Department of Revenue Administration’s (DRA) Tax Amnesty Program.

Alabama Notice for Out-of-State Sellers

Alabama has issued the following notice to all persons, firms and corporations located outside Alabama and making retail sales of tangible personal property into the State of Alabama:

Effective October 1, 2015, for tax returns which are due on or before November 20, 2015, Legislative Act No. 2015-448, entitled the “Simplified Seller Use Tax Remittance Act,” allows eligible sellers to participate in a program to collect, report and remit a flat eight percent (8%) sellers use tax on all sales made into Alabama. An eligible seller is one that sells tangible personal property or a service into the State of Alabama from an inventory or location outside the state but does not have a physical presence in the State of Alabama and who is not otherwise required by law to collect tax on sales made into the state.

Looking for Information About Changes to Article IV of the Compact?

At its annual business meeting in July 2014, the Commission adopted, as uniformity recommendations to the states, several amendments to provisions within Article IV of the Compact. Article IV of the Compact is composed of the Uniform Division of Income for Tax Purposes Act (UDITPA). There are a couple of remaining sections of Section 18 and conforming amendments throughout Article IV that are awaiting consideration for approval by the Commission. Once consideration of these remaining items has occurred, a revised model Compact will be posted on this website in addition to the original model drafted in 1966.

Commission Files Brief in Supreme Court

The MTC has filed an amicus brief in support of California's petition for certiorari in the United States Supreme Court. The case, Hyatt, raises the issue of state sovereignty, as it considers to what extent one state must extend legal immunities to another state. The MTC filed its brief to point out the impact that lawsuits like this one could have on state tax enforcement and on our system of cooperative federalism.

MTC Sends Letter on Digital Goods Act

The Commission sent a letter to the chairmen and ranking members of the Senate Committee on Finance and the House Judiciary Committee regarding H.R. 1643/S. 851, the Digital Goods and Services Tax Fairness Act of 2015. The Chair of the Commission, Alabama Commissioner of Revenue Julie Magee, expressed concerns about the bill, highlighting some flaws in the legislation --

Trends in State Corporate Income Taxes Revisited (Again)

This article updates the article that appeared in the Winter 2007 issue of the Multistate Tax Commission Review which, in turn, updated a similar article that appeared in the Fall 2000 issue of that Review. The previous article was written at a time when state corporate income taxes were growing at unprecedented rates. However, in the recent past, this revenue source has been growing much more slowly.

State Fiscal Conditions

On February 4, Scott Pattison, Executive Director of the National Association of State Budget Officers (NASBO), spoke to the Tax Economists Forum, a Washington, DC based group of public finance economists, about the current condition of state finances and the outlook for the future. To briefly summarize Mr. Pattison’s presentation: the current fiscal condition of state governments has improved somewhat when compared to fiscal years 2013 and 2014, but have not yet completely recovered from the Great Recession.

Commission’s Brief in Massachusetts Marblehead Case Cited in Decision

In a case where the MTC had filed an amicus brief supporting the Massachusetts Department of Revenue, the Massachusetts Supreme Judicial Court has found in favor of the Department. The case concerned the proper application of MTC model apportionment rules for financial institutions.

Commission Files Brief in Tennessee Vodafone Case

The MTC has filed an amicus brief in the Vodafone case before the Supreme Court in Tennessee. The brief addresses the use of UDITPA Section 18 – equitable apportionment authority. The taxpayer argues that under the statutory cost-of-performance rule, sales of mobile telecommunications services to customers in Tennessee should not be sourced to the state.

MTC Sends Letter on Goodlatte's Draft Hybrid Origin-Sourcing Bill

The Commission sent a letter to U.S. House Judiciary Committee Chair Bob Goodlatte, R-Va., on his draft hybrid origin-sourcing alternative to the Marketplace Fairness Act. The Chair of the Commission, Alabama Commissioner of Revnue Julie Magee, highlighted significant problems with the draft bill, which hasn't been introduced yet but has been circulated for comments.

MTC Files Amicus Brief in Alabama’s CSX Case

The Commission filed an amicus brief with the U.S. Supreme Court in Alabama Dept. of Revenue, et al. v. CSX Transportation, Inc. supporting Alabama’s imposition of sales and use tax on rail carriers’ diesel purchases while exempting those who use roads or waterways for transit, arguing that Alabama’s taxes do not discriminate against railroads under the 4-R Act.

FTA Seeks General Counsel/Legislative Director

The Federation of Tax Administrators (FTA) is seeking a person who can serve as both general counsel and legislative director. FTA provides tax administration-related services to the tax agencies of the 50 states, D.C, New York City and Philadelphia. Please review the job announcement for minimum requirements and more details about the position.

MTC Files Brief in Comptroller of Maryland v. Wynne

On August 5, 2014, the Commission filed an amicus brief with the U.S. Supreme Court in Comptroller of Maryland v. Wynne, arguing that Maryland should not be required to provide a credit for taxes paid by residents to other states against the tax those residents owe to Maryland.

C. A. Daw Recipient of the 2014 Paull Mines Award

On July 30, 2014, the Commission awarded the 2014 Paull Mines Award for Contribution to State Tax Jurisprudence to the late C. A. Daw, chief counsel for the Montana Department of Revenue, who lost a battle with cancer in May of this year. His wife, Mari, was present to accept to the award.

MTC Review Available Online

This issue contains three articles written by current MTC staff members and by former policy research interns. The first, “The Überexpert,” is by Harold Jennings, senior audit supervisor, and Robert Schauer, computer audit specialist.

Georgetown Law Offers State & Local Tax Certificate Program

State and Local Taxation (SALT) is an area of practice that offers promising career opportunities in major accounting firms, state and local revenue departments, and law firms.

Commission’s Annual Legislative Day a Success

Last month, state tax administrators participating in the Commission’s annual legislative day availed themselves of an opportunity to present their issues and concerns to their state’s congressional representatives and senators...

About the Nexus Program

The National Nexus Program was founded in December 1990. It has been created by the Multistate Tax Commission in furtherance of the following purposes...

NGA Releases Guiding Principles on Federal Tax Reform

The National Governors Association (NGA) released Guiding Principles on Federal Tax Reform on March 13, 2013, in preparation for comprehensive federal tax reform in the 113th Congress.

Hearing Officer Report on Proposed Recommended Amendments to Model Multistate Tax Compact Article IV [UDITPA]

In December, 2012, the Multistate Tax Commission Executive Committee approved a public hearing for proposed amendments to Article IV [UDITPA] of the model Multistate Tax Compact.

Commission Files Amicus Brief in Gillette Case

On October 21, 2013, the Commission filed its amicus curiae brief on the merits in support of California in Gillette v. California Franchise Tax Board now pending at the California Supreme Court. In the brief, the Commission argues that California law may vary from Compact Articles III.1 and IV because the Multistate Tax Compact is an advisory compact, and Articles III.1 and IV of the Compact are more in the nature of a model uniform law.

MTC Annual Conference & Committee Meetings

The Commission’s 2014 Annual Conference and Committee Meetings are being held on July 28 – 31, 2014 in Albuquerque, New Mexico. Registration is required for those attending the Wednesday, July 30 conference and strongly encouraged for anyone attending any of the various committee meetings during the week.