Corporate Close-Up: Hot Enough? MTC Compact Controversy to Broil at Georgetown SALT Conference


The annual Advanced State and Local Tax Institute at Georgetown University Law Center is fast approaching (Aug. 7 and 8). This year’s Institute is organized into four themed segments: apportionment, mergers and acquisitions, tax base and the “greatest issues in SALT.” 

The themes themselves are a good reflection of the latest trends in state tax. But the apportionment segment in particular will likely be of great interest to the corporate tax world, given that it falls only a week after the yearly Multistate Tax Commission meeting . This year’s MTC meeting will include a vote on the updates to the Multistate Compact’s uniformity provisions, including:

  • Definition of “business income” (Compact § 1(a))
  • Definition of “sales” (Compact § 1(g))
  • Factor weighting (Compact § 9)
  • Sales factor sourcing for services and intangibles (Compact § 17)
  • Distortion relief (Compact § 18(b))

The Georgetown Institute’s segment on apportionment will include topics that will be significantly impacted by the MTC’s decisions at their annual meeting. The panel discussion covering the trend towards single sales factor apportionment and the session covering sourcing of sales other than tangible personal property will undoubtedly be influenced by the MTC’s vote on sales factor sourcing for services and intangibles, as well as the definition of business income and sales. The panel on alternative apportionment will likely reflect the MTC’s decisions surrounding distortion relief and factor weighting.

 

With changes to the Multistate Compact fresh and unexplored, this year’s Advanced State and Local Tax Institute promises to serve as the first word on issues affecting the apportionment formula and its treatment among the states.

By Melissa Fernley

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