Section 18 Regulatory Project
The Section 1 and 17 workgroups have identified a list of issues that may need to be addressed by the Uniformity Committee in light of changes to Article IV (UDITPA) adopted by the Commission in 2014 and 2015. The list includes (but is not limited to) the following:
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- Address the possible distortion that could be caused by the exclusion of functional receipts from the definition of “receipts” for purposes of the receipts factor in certain circumstances.
- Consider exceptions to the definition of “receipts,” which now excludes receipts from securities and hedging, where these receipts might represent “transactional” receipts for certain taxpayers (e.g. brokers) as well as how possible distortion might be avoided (e.g. churning of investments).
- Consider whether receipts from factoring of receivables should ever be included in the receipts factor.
- Address any situations where general population data, used under the draft Section 17 sourcing rules, might result in distortion and what methods might be used to address that distortion.
- Consider whether there needs to be a “de minimis rule” for sourcing of receipts in certain instances so that the taxpayer may use a proxy for sourcing, or possibly throw out those receipts from the factor.
- Address regulations that might be needed to interpret and implement the amendments to Article IV, Section 18 made by the Commission in 2015.
- Consider other special industry rules that might be necessary.
Compact Article IV Section 18 Proposed Model
Regulations Working Group
Bylaw 7 Survey
- Hearing Officer Report
- Reg. IV.18.(c) Receipts Factor (edited as directed by Executive Committee, April 26, 2018)
- Reg. IV.18.(d) Receipts Factor – Bank Holding Companies and Subsidiaries
Public Hearing
- Agenda and Notice for Public Hearing, February 20, 2018
- Reg. IV.18.(c) Receipts Factor
- Reg. IV.18.(d) Receipts Factor – Bank Holding Companies and Subsidiaries
Meeting Materials
Agendas from previous meetings, materials, and other project related information:
- Agenda, latest meeting
- Section 18 Staff Draft – for presentation at meeting 8/1/17
- Proposal to broaden scope of financial institution treatment of securities and hedging
- Boucher proposal for financial institution subsidiaries
- Section 18 Staff Draft – current as of 7/17/17
- Section 18 Staff Draft – current as of 7/11/17
- Section 18 Staff Draft – current as of 6/27/17
- Section 18 Staff Draft – current as of 6/20/17
- Section 18 Staff Draft – current as of 6/6/17
- Working group member’s suggested language re: financial institutions
- Working group member’s suggested language for equitable apportionment exception (Section g)
- Section 18 Staff Draft – current as of 5/30/17
- Section 18 Staff Draft – current as of 5/15/17
- Section 18 Staff Draft – current as of 5/1/17
- Draft Model With Examples – Current as of 4/18/17
- Additional Throw-Out Example
- Updated clean-up to Section 18 Draft, dated 4/4/17
- Updated clean-up to Section 18 Draft, 4/3/17
- Proposed clean-up to Section 18 Draft
- The draft of the proposed Model General Regulation as updated Mar. 3, 2017 is found here.
- Examples – application of Section 18, presented to Uniformity Committee March 8, 2017.
- Memo to Uniformity Committee re: status of project, March 5, 2017.
- The draft of the proposed Model General Regulation as updated Feb. 21, 2017 is found here.
- The draft of the proposed Model General Regulation as updated Feb. 14, 2017 is found here
- Staff Comment Regarding Operation of Proposed “Throw-out” Rule in Section 18 Model Regulation for Apportionment of Income for Taxpayers with No “Receipts”
- The draft of the proposed Model General Regulation as updated Feb. 7, 2017 is found here.
- The draft of the proposed Model General Regulation as updated Jan. 31, 2017 is found here
- The draft of the proposed Model General Regulation as updated Jan. 24, 2017 is found here.
- The draft of the proposed Model General Regulation as updated Jan. 10, 2017 is found here.
- The draft of the proposed Model General Regulation as updated Jan. 2, 2017 in response to suggestions from the Uniformity Committee on Dec. 14, 2016, is found here.
- Excerpted notes from the Uniformity Committee meeting.
- The draft of the proposed Model General Regulation as presented at the Uniformity Committee meeting on Dec. 14, 2016, is found here.
- Project Update Memo to Uniformity Committee – Dec. 14, 2016
- The draft of the proposed Model General Regulation as updated Dec. 5, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Nov. 28, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Nov. 21, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Nov. 15, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Nov. 8, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Oct. 30, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Oct. 11, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Oct. 4, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Sept. 20, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Sept. 13, 2016, is found here.
- The draft of the proposed Model General Regulation as updated Sept. 6, 2016 is found here.
- The draft of the proposed Model General Regulation as updated May 10, 2016 is found here.
- Meeting Minutes, September 6, 2016
- Agenda, April 22, 2016
- Section 18 General Rules to Address Sales Factor Distortion – Staff Proposal, Updated- May 10, 2016
- Section 18 General Rules to Address Sales Factor Distortion – Staff Proposal, May 9, 2016
- Section 18 General Rules to Address Sales Factor Distortion – Staff Proposal, May 2, 2016
- Meeting Notes for Telephonic Meeting on April 26, 2016
- Section 18 General Rules to Address Sales Factor Distortion – Updated on April 19, 2016
- Section 18 General Rules to Address Sales Factor Distortion – Updated as of April 12, 2016
- Section 18 General Rules to Address Sales Factor Distortion – Updated Staff Proposal
- Section 18 General Rules to Address Sales Factor Distortion – Staff Proposal
- New York Issuer’s Allocation Percentage Example, April 19, 2016
- See paragraph (11) and in particular paragraph (11) (b)
- Massachusetts language on de minimis factor (External link from Massachusetts Department of Revenue)
Additional information on this meeting and agenda may be secured from Bruce Fort, Multistate Tax Commission, 444 North Capitol Street, N.W., Suite 425, Washington, D.C. 20001-1538, Telephone: (202) 650-0300.
UDITPA Sec. 18 Regulatory Project
Work Group Meeting Reference Information
- Memorandum: suggestions for possible solutions to the problem of sourcing income from special purpose (usually non-operational) entities, March 22, 2016
- Proposed framework for inserting an edit into Sec. 18, March 22, 2016
- Memorandum: Considerations for Special Allocation and Apportionment of Income Under Article IV Where Taxpayer Has No or Minimal “Transactional” Receipts, March 8, 2016
- Agenda, February, 2016
- Section 18 Conforming Model Special Industry Rules, February 9, 2016:
- California proposed market sourcing regulation based on benefits received statute, February 9, 2016
- Supplementary Information on Recommended Topics for Consideration by Section 18 Workgroup, February 2, 2016
- Agenda, January 19, 2016
- Section 18 – Original Format, January 19, 2016Report to Uniformity Committee Regarding Issues to be Addressed under Section 18, January 19, 2016
- Adopted Amendments to Section 18 of model Multistate Tax Compact Article IV [UDITPA]
- Staff proposal 5-2-16 HH, May 2, 2016. The draft of the proposed Model General Regulation as updated Dec. 5, 2016, is found here.
- Updated clean-up to Section 18 Draft, April 3, 2017
- Draft Model With Examples – Current as of 4/18/17
- Additional Throw-Out Example