Tuesday, March 27, 2012

Multistate Tax Commission Seeking to Revive UDITPA-Revision Debate?

In 2009, the Multistate Tax Commission's effort to  have  NCCUSL (Uniform Law Commission) undertake a rewrite of UDITPA (Uniform Division of Income for Tax Purposes Act) was defeated by industry groups when NCCUSL decided to put the rewrite effort on hold. Not to be deterred, the MTC has continued its efforts to rewrite UDITPA independent of NCCUSL, and on May 10, 2012, the Executive Committee of the MTC will have before it all the pieces of the project to rewrite UDITPA.

On March 7, the MTC Uniformity Committee approved for consideration by the Executive Committee the final pieces of the project which include: a draft revision of the definition of business income, a draft revised section on distortion relief, language narrowing the definition of sales, language revising sales factor sourcing of services and intangibles, and recommendations that the UDITPA apportionment formula be switched to a double-weighted sales factor. Each of these measures will be up for debate by the MTC Executive Committee at its May 10 meeting in Washington D.C.

The National Conference of State Legislators, one of the groups that was oppossed to the UDITPA rewrite in 2009, is again expressing its opposition, and it is likely that COST and other similar groups will again voice their opposition to the MTC's efforts in the coming weeks.

Stay Tuned.

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