Shaking things up in state and local tax
Shaking things up in state and local tax
In a rare special meeting on February 24, 2017, the Multistate Tax Commission (MTC) adopted amendments to the MTC’s Model General Allocation and Apportionment Regulations that it has worked on since 2014. Among other things, the 94-page Model Regulations:
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Tinkering with a state’s interest provisions can be a hidden way to increase revenue without expanding the base or increasing the tax rate—an important work-around for legislators who have pledged not to increase taxes. However, fundamental fairness requires states to follow specific tenets related to interest provisions. View this State Tax Notes article, which outlines…
By Chris Mehrmann and Open Weaver Banks
The Michigan Supreme Court denied an application for leave to appeal a Michigan Court of Appeals decision that sanctioned the Michigan’s Legislature’s retroactive withdrawal from the Multistate Tax Compact. The court summarily denied the appeal—which was filed by Harley Davidson Motor Company, Inc. and 13 other taxpayers—explaining that…
Even those of us who practice in the state and local tax (SALT) field have been exposed to federal judicial tax doctrines. Many have been applied by state courts in SALT matters and have even been codified by some states. Read about the origins of the following four lesser known doctrines, and learn how these doctrines…
Recently proposed Treasury regulations under IRC § 385 would create sweeping changes to the federal income tax treatment of related-party debt. The Proposed Regulations could also have far-reaching effects for state income tax purposes, particularly on the deductibility of intercompany interest expenses in separate company reporting states.
View the full Legal Alert.
Over the last decade, multistate employers have witnessed a blizzard of state enforcement efforts of their nonresident withholding requirements. During that same time, large business tax departments have been snowed under by internal auditors’ questions of policies and procedures related to state nonresident withholding compliance. Even the U.S. Congress has shown an interest in plowing…
The Arm’s Length Adjustment Service Advisory Group of the Multistate Tax Commission continued its transfer pricing effort with a teleconference today to discuss its training and implementation program. This initiative has extended over a year, and the MTC is aiming for approval from the Executive Committee by May 2015. States…
Today the U.S. Supreme Court unanimously held in Direct Marketing Ass’n v. Brohl that the Tax Injunction Act does not bar Direct Marketing Association’s federal lawsuit against Colorado’s sales tax reporting regime. The substantive challenge to the constitutionality of the reporting regime will continue at the Tenth Circuit. Continue reading…
At its Fall Meeting in Nashville, Tennessee on December 11-12, the MTC’s Executive Committee voted to formally contact states to solidify whether there is sufficient financial commitment to fund any potential MTC transfer pricing program. The MTC also formally announced that Iowa, Pennsylvania and Rhode Island will join the MTC audit program. Additionally, the MTC’s…
By Derek Takehara and Andrew Appleby
The Illinois Department of Revenue determined that a wholesale distributor of international telecommunications services could source its long-distance telephone receipts based on its Illinois property factor. The taxpayer, an intermediate international telecommunications carrier, owned and rented equipment in several states, including Illinois. Illinois law provides that a taxpayer must…
