Multistate Tax Commission approves market-based sourcing model regulations

Overview

​On February 24, 2017, the Multistate Tax Commission (Commission or MTC) held a Special Meeting, which was called to vote on the Resolution Adopting Amendment to the Multistate Tax Commission’s Model General Allocation and Apportionment Regulations (Resolution).

The Commission voted to adopt the Resolution, approving the Model General Allocation & Apportionment Regulations with Amendments (Amendments).

The Amendments change several sections of the Model General Allocation & Apportionment Regulations (the regulations) including Sections 1, 9, 17, and 18. Of perhaps the most interest to taxpayers is the adoption of a new receipts sourcing methodology in Section 17 to provide that receipts, other than receipts from the sales of tangible personal property, are sourced to a state if and to the extent the taxpayer’s market for sales is in the state.

Approval of the Resolution represents the final step in the Commission’s process to update the regulations to reflect amendments to the Uniform Division of Income for Tax Purposes Act (UDITPA) provisions found in the Multistate Tax Compact (Compact) Article IV. Now that the MTC has adopted the Amendments, Compact member states may choose to adopt the amended regulations.

[Resolution Adopting Amendments to the Multistate Tax Commission’s Model General Allocation and Apportionment Regulations (2/24/2017) and Model General Allocation & Apportionment Regulations With Amendments Submitted for Adoption by the Commission (2/24/2017)]