The journey of the MTC's joint audit program

October 2013


In this September 2013 article, Michael Herbert and Bryan Mayster explore the journey of the Multistate Tax Commission's joint audit program in light of the Commission’s early purpose of fighting for uniformity, efficiency, and compatibility of tax laws governing multistate businesses.

Herbert and Mayster review the early journey of the Multistate Compact and examine the MTC's current audit practices. The article explores the following topics:

  • the Commission's touting of other successful interstate compacts, explored in more detail in Herbert and Mayster's, November 2012 article, Multistate Tax Commission 1968 brochure on the Multistate Compact, which is included in the attached file following the main article
  • the Commission's perspective on whether the Multistate Tax Compact satisfies certain indica of a valid compact
  • the inefficiency and ineffectiveness of MTC audits
  • the unduly burdensome nature of the audit
  • the inequitable treatment of taxpayers
  • powers granted to the MTC and interstate audits
  • Gillette's impact on the audit program

In 1968 the Commission set upon a journey toward the establishment of equitable and just methods of resolving the tax problems of multistate businesses. Today, as the result of a lack of interstate uniformity and an inefficient, burdensome, inequitable, and arguably unauthorized audit program, the commission may have lost its reason for taking that journey. As a result, its fate may lie in the transformation from an organization that promoted uniformity and enhanced compliance standards into a body whose only function is to audit. As taxpayers and states wander through the uncertainty of the interstate audit program, possibly it is time for them find ways to work together again on new solutions to the issues facing multistate taxpayers today.


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Peter Michalowski
National SALT Practice Leader
Tel: +1 (646) 471 5259

Robert Bazata
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Tel: +1 (646) 471 5140

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