MultiTax Commission

An intergovernmental state tax agency whose mission is to promote uniform and consistent tax policy and administration among the states, assist taxpayers in achieving compliance with existing tax laws, and advocate for state and local sovereignty in the development of tax policy.

A Tale of Two Cities

A tale article

Bruce Fort is Senior Counsel to the Multistate Tax Commission. In this article, originally published in Law 360’s State and Local newsletter on March 28 and 29, 2023, Fort describes two recent appellate decisions that took very different approaches to construing UDITPA. The Virginia Supreme Court in Virginia Department of Taxation v. R.J. Reynolds Company applied a “textualist” approach to construing UDITPA’s property factor, holding that the taxpayer was not “using” tobacco as it aged in a Virginia warehouse. The legislative history of UDITPA and model regulations developed by the MTC suggested a far broader application of the phrase “used in the state.”

The Pennsylvania Supreme Court took a very different approach to construing UDITPA in Synthes USA HQ, Inc. v. Commonwealth, holding that the Act’s sales factor provisions should be construed so that such sales would be apportioned to the state where services were delivered, in furtherance of the legislature’s overall intent, despite objections that the principal “costs of performance” for such activity may have occurred within the state.

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