New Year, New Legislative Sessions and the MTC

I hope your new year is going well. State tax legislative sessions are beginning and talks of crazy tax hikes (Illinois), and imposing sales taxation collection obligations on remote retailers is commencing (Wyoming). Some may even try to eliminate the corporate income tax (Missouri).

The Multistate Tax Commission continues its Sec. 18 Regulatory Project. According to the MTC, 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:

  •  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 factory.
  • 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.

In addition to the technical matters we deal with, I hope your career is moving in the direction you desire. If not, remember, action over intention. Can't get a different result by doing the same thing over and over again.