Sutherland’s SALT Poll, “MTC Considering Broad Throwout Rule Under Cloak of Redefining ‘Sales,’” revealed that more than 80% of those surveyed oppose narrowing the scope of the type of “sales” used to calculate the receipts factor. The vast majority of respondents were opposed to altering the sales factor because they believed all receipts used to calculate business income should be reflected in the apportionment formula. The MTC’s proposal and the poll results are not surprising based on Sutherland’s experience with escalating attempts by state auditors to “throwout” certain types of receipts from the sales factor.


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On April 26, the Multistate Tax Commission (MTC) Income & Franchise Tax Uniformity Subcommittee (Subcommittee) held the first of three scheduled meetings to revise corporate income tax apportionment. Specifically, the MTC is seeking to limit the definition of “sales” under Article IV.1(g) of the Uniform Division of Income for Tax Purposes Act (UDITPA) for purposes

The Multistate Tax Commission (MTC) is proposing to significantly change how the sales factor is calculated for apportioning corporate income. Currently, most states define “sales” includable in the sales factor as “all gross receipts of the taxpayer” (except those receipts related to nonbusiness income). MTC members are considering a proposal to limit the definition of “sales” to

Sutherland’s SALT Poll, “The Impact of State Budget Deficits,” revealed that the majority of those surveyed believe that state budget deficits have led to a difficult state tax audit environment. The poll results are consistent with Sutherland’s recent experience with state tax auditors—an overwhelming 80% of respondents believe that state auditors generally are less flexible in negotiating difficult issues. Further, 60% of the respondents experienced state tax auditors creating more substantial assessments during this time of state budget shortfalls.


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There is much discussion about how state budget deficits are leading to a difficult state tax environment. For example, some folks believe that the challenging fiscal conditions faced by states are leading to aggressive auditor practices. 

Sutherland’s first poll of state and local tax issues provided a mix of expected and surprising results. The poll surveyed respondents’ views about granting a waiver of the statute of limitations to provide a state auditor more time to complete an audit. Following is our analysis and the results of the poll.


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