It is more complicated to determine an in-state sale regarding the provision of multistate services or licenses of intangibles. Historically, states looked to a taxpayer’s costs of performing the service or licensing the intangible. Some states have become critical of this cost-of performance method and replaced it with a market-based method of computing in-state sales.

In this edition of A Pinch of SALT, Eversheds Sutherland attorneys Jeffrey Friedman, Nicholas Kump and Robert Merten III discuss the recent amendments to the Multistate Tax Commission’s (MTC) Model General Allocation and Apportionment Regulations; how the model regulations can be further improved; how states are responding to the model regulations; and what is next for the MTC.

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