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On June 2, the Arm’s Length Advisory Group (the Group) of the Multistate Tax Commission (MTC) met in St. Louis, Missouri, to begin the process of developing a multistate arm’s length pricing adjustment service. States participating in the meeting included Alabama, Florida, Georgia, Iowa, Kentucky, New Jersey, North Carolina and the District of Columbia. Joe Garrett (Alabama) was elected to chair the Group. The Group is primarily concerned with addressing the inability to effectively conduct transfer pricing audits at the state level. It seeks to create a viable project design sufficiently developed for an operational model by July 2015.
Continue Reading MTC Launches Transfer Pricing Effort

By Ted Friedman and Andrew Appleby

The Indiana Department of Revenue determined that an audit correctly required a distribution and manufacturing subsidiary of a tobacco company to file a combined return with its corporate affiliates. The Audit Division concluded that the subsidiary’s income, as reported, did not fairly reflect its Indiana source income because of…

On May 8, the Multistate Tax Commission’s Executive Committee voted to advance its amendments to the Multistate Tax Compact’s definition of nonbusiness income, definition of “sales,” factor weighting, and the sourcing of service and intangible revenue. The Committee essentially embraced the MTC’s original proposed amendments and failed to incorporate any of the comments and observations…

By Kathryn Pittman and Timothy Gustafson

The Oklahoma Supreme Court held Oklahoma’s deduction for capital gains arising from the sale of a company headquartered in the state for three or more years does not violate the dormant commerce clause of the U.S. Constitution. The taxpayer, a California company with its headquarters in Florida, sold…

By Ted Friedman and Timothy Gustafson

The Supreme Court of Missouri reversed and remanded a decision of the Administrative Hearing Commission (see our coverage of the Commission’s January 28, 2013 decision here) and held that income from a “rabbi trust”—a trust established by a corporation to fund a nonqualified deferred compensation plan for company…

On March 31, 2014, New York State Governor Andrew Cuomo signed into law the 2014-2015 New York State Budget (Budget), which results in the most significant overhaul of New York’s franchise tax in decades. The Budget brings about monumental change for corporate taxation in New York by eliminating the Bank Franchise Tax (Article 32), subjecting…

The New York State Governor and Legislature recently enacted the 2014-2015 New York State Budget, Senate Bill 6359-D and Assembly Bill 8559-D (Budget), which results in the most significant overhaul of New York’s franchise tax on corporations in decades. In this edition of New York Tax Reform Made Easy, we will address the creation of the Prior Net Operating Loss deduction.
Continue Reading New York Tax Reform Made Easy: Net Operating Loss