The Show-Me State Shows How It’s Done: Missouri Is a Model MTC State

November 2013


In this October 21, 2013, Tax Analysts article, David Kennedy, Michael Herbert, and Bryan Mayster examine how Missouri allows taxpayers to make the Multistate Tax Compact equally weighted three-factor apportionment election and how such treatment may serve as a model for other compact states to follow.

The Multistate Tax Compact is at the heart of current state tax disputes regarding whether state taxpayers may elect to use the compact's equally weighted apportionment formula instead of a state's statutory formula.

Drafted by the National Association of Tax Administrators, the Federation of Tax Administrators, and various state attorneys general in response to possible federal intervention in state income taxation, the compact became effective in 1967 upon its adoption by seven states. Since then, it has undergone many changes and faced many challenges.

When considering the time, effort, and resources states have spent auditing and litigating taxpayers that have made the election, the most recent challenges to the compact, as well as the implications of enacting legislation to repeal membership, the authors explore whether these states would not have been better off following Missouri’s example in 1967 by making the compact apportionment election available to all taxpayers.

Contact us

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

Robert Bazata
Partner - National Practice Leader, State and Local Tax
Tel: +1 (646) 471 5140

Follow us