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.

State Taxation of Partnerships 

Project Description

At its meeting in April 2021, the Uniformity Committee took up a project on state taxation of partnerships based on the
recommendations of the Standing Subcommittee that a work group be established to consider issues affecting:

    • Sourcing of partnership operating income and partnership items for state tax purposes;
    • Sourcing and taxation of gains and losses from the sale of partnership interests;
    • Entity level taxation issues including transfer pricing or combined filing issues; and
    • Other administrative and enforcement issues including information reporting and withholding.

On this project page, you will find:

    • Information about upcoming and past meetings
    • Whitepaper outline drafts
    • Written comments and feedback
    • Additional background information

Upcoming Meeting Notice

Agenda and Materials

Meetings are held each month on the third Wednesday at 3:00 p.m. Eastern

The next meeting of the work group is Wednesday, September 18, 2024

AGENDA

 I.   Welcome and Initial Public Comment

II.   Developments in Taxation of Partnership Income

III. Update on Approaches to Sourcing Income in Complex Partnership Structures

– Slides – Developments and Proposed White Paper – September 18, 2024 (PDF)(PowerPoint)

– Research Section of White Paper – September 18, 2024

 – Slides – Proposed White Paper on Sourcing in Complex Structures – July 17, 2024 (PDF) (PowerPoint) 

          IV. Upcoming Events – November Uniformity Meeting & Partnership Training Summit

V.    New Business & Adjourn

RECENT DOCUMENTS

The most recent versions of the project documents are here. Prior versions along with meeting agendas and materials are posted further below on this page. 

  • Multistate Research on Tiered Partnership Sourcing –

– Updated Multistate Research on Tiered Partnership Sourcing – July 17 2024 (PDF)(Word)
– Research – Tiered Partnership Sourcing – June 20, 2024 (PDF)
– Prior Version of Research Report – as of April 17, 2024 (PDF)

  • Sourcing Guranteed Payments for Services –

– White Paper on Sourcing of Guaranteed Payments – October 12, 2023 (PDF)
– White Paper on Sourcing of Guaranteed Payments – October 12, 2023 (Word) 
– Draft Models on Sourcing of Guaranteed Payments and Additional Credits (PDF)
– Draft Models on Sourcing of Guaranteed Payments and Additional Credits (Word)

  • Sourcing Investment Partnership Income – Draft Model – 

– Draft Investment Partnership Model – June 15, 2023-Revised (PDF)
– Draft Investment Partnership Model – June 15, 2023-Revised (Word)

  • Proposal to Consider General Framework – 

– Discussion draft of Proposed General Framework (Word)
– Discussion draft of Proposed General Framework (PDF)

Dial-in/Log-in Information 

Log-In or Use App to Join ZoomGov Meeting

https://www.zoomgov.com/j/1614807575?pwd=aVFrOG5CbFBsTmR0bDdoZFZSY0J1Zz09

Meeting ID: 161 480 7575 – Passcode: 503412

Dial by your location

+1 669 254 5252 US (San Jose)
+1 669 216 1590 US (San Jose)
+1 646 828 7666 US (New York)
+1 551 285 1373 US (New Jersey)

 Meeting ID: 161 480 7575

Find your local number: https://www.zoomgov.com/u/aex6yGIX03

If you experience any kind of difficulty participating in the meeting, please contact events@mtc.gov.

Project Materials

Latest Documents – By Subject

Partnership Issue Outline

The work group began this project by drafting a Partnership Issue Outline that identifies and generally describes a comprehensive list of potential issues and notes the relationships between those issues.

Current Version

Past Versions (Word)

Subchapter K Training

The work group directed MTC staff to provide an online basic training on Subchapter K.  The free training is available to state tax administrators who request access by emailing Chris Barber.

Investment Partnerships

At the December 10, 2021 Partnership Work Group meeting, the Work Group decided to begin developing generally recommended practices or positions for the state tax treatment of investment partnerships. The Work Group first drafted a White Paper on Investment Partnerships and then drafted a Model Statute. Upon further discussion and comment, the work group determined that a Model Regulation would better address this issue because the treatment of investment partnership income is already supported by state law, and a regulation would provide greater certainty in fact-specific situations. Current and prior versions of the white paper and model are below, along with written public comment.

Model Rule (with Comments)

Current Version

Previous Versions

White Paper

Current Version

Previous Versions

Guaranteed Payments

At its February 15, 2023 meeting, the Work Group began addressing sourcing guaranteed payments from services. The Work Group has prepared a draft White Paper that provides background on the federal treatment of guaranteed payments, summarizes guaranteed payments issues addressed by the states, categorizes the different ways states source guaranteed payments, and provides related findings and recommendations.  A draft of the White Paper, Proposed Findings and Recommendations on Sourcing of Guaranteed Payments, and a spreadsheet demonstrating different sourcing methods currently used by the states are avaialble below.

At the September 20, 2023 meeting, the Work Group directed staff to draft a model that sources guaranteed payments for services similarly to other items of distributive share.

Current Documents

Additional Background Information

General Research and Analysis
Partnership Tax Reporting & Audit Rules
State Pass-Through Entity (PTE) Taxes

Prior Meeting Materials

Project Report to the MTC Uniformity Committee – July 30, 2024

    • Project Report to the MTC Uniformity Committee – July 30, 2024 (PDF)(PowerPoint)

Partnership Project Work Group – July 17, 2024

    • Slides – Proposed White Paper – Sourcing for Complex Structures – July 17, 2024 (PDF)(PowerPoint)
    • Updated Multistate Research on Tiered Partnership Sourcing – July 17, 2024 (PDF)(Word)

Partnership Project Work Group – June 20, 2024

    • Meeting Slides (PowerPoint) (PDF)
    • General Framework of State Pass-Through System – October, 2023 (Word) (PDF)
    • Partnership Work Group Report to the Uniformity Committee (PDF) (PowerPoint)

Partnership Project Work Group – April 17. 2024

    • Multistate Research on Tiered Partnership Sourcing as of April 2024 – REVISED (PDF) and (Word)
    • Report on Special Allocation Issues (PDF) (PowerPoint)

Partnership Project Work Group – March 20, 2024

    • Multistate Research on Tiered Partnership Sourcing as of March 2024 – REVISED – (PDF) and (Word)
    • Multistate Research on Tiered Partnership Sourcing as of March 2024 (PDF) and (Word)
    • Status Report – March 20 2024 – (PowerPoint) and (PDF)

Partnership Project Work Group – February 21, 2024

    • Status Report Slides – Feb. 2024 (PDF) and (PowerPoint)
    • Multistate Research on Tiered Partnership Sourcing as of February 2024 (PDF) and (Word) 

Partnership Project Work Group – January 17, 2024

Project Report to MTC Uniformity Committee – November 14, 2023 

Partnership Project Work Group – October 18, 2023

Partnership Project Work Group – September 20, 2023

Other Reports and Information from Earlier Calls and Meetings

Older Meeting Archives