PRINTER'S NO. 1269
No. 1110 Session of 1983
INTRODUCED BY TRELLO, PISTELLA, JOHNSON, AFFLERBACH, WOZNIAK,
COY, D. W. SNYDER, SEVENTY, HALUSKA, ITKIN, MAIALE,
KOWALYSHYN, BELOFF, McVERRY AND VAN HORNE, MAY 25, 1983
REFERRED TO COMMITTEE ON FINANCE, MAY 25, 1983
AN ACT
1 Providing for the Commonwealth's participation in a Multistate
2 Tax Compact.
3 TABLE OF CONTENTS
4 Article I. Purposes
5 Article II. Definitions
6 Article III. Elements of Income Tax Laws
7 1. Taxpayer Option, State and Local Taxes.
8 2. Taxpayer Option, Short Form.
9 3. Coverage.
10 Article IV. Division of Income
11 Article V. Elements of Sales and Use Tax Laws
12 1. Tax Credit.
13 2. Exemption Certificates, Vendors May Rely.
14 Article VI. The commission
15 1. Organization and Management.
16 2. Committees.
17 3. Powers.
1 4. Finance.
2 Article VII. Uniform Regulations and Forms
3 Article VIII. Interstate Audits
4 Article IX. Entry Into Force and Withdrawal
5 Article X. Effect on Other Laws and Jurisdiction
6 Article XI. Construction and Severability
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. The Multistate Tax Compact is hereby enacted into
10 law and entered into with all jurisdiction legally joining
11 therein, in the form substantially as follows:
12 MULTISTATE TAX COMPACT
13 Article I
14 Purposes
15 The purposes of this compact are to:
16 1. Facilitate proper determination of state and local tax
17 liability of multistate taxpayers, including the equitable
18 apportionment of tax bases and settlement of apportionment
19 disputes.
20 2. Promote uniformity or compatibility in significant
21 components of tax systems.
22 3. Facilitate taxpayer convenience and compliance in the
23 filing of tax returns and in other phases of tax administration.
24 4. Avoid duplicative taxation.
25 Article II
26 Definitions
27 As used in this compact:
28 1. "State" means a State of the United States, the District
29 of Columbia, the Commonwealth of Puerto Rico or any territory or
30 possession of the United state.
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1 2. "Subdivision" means any governmental unit or special
2 district of a state.
3 3. "Taxpayer" means any corporation, partnership, firm,
4 association, governmental unit or agency or person acting as a
5 business entity in more than one state.
6 4. "Income tax" means a tax imposed on or measured by net
7 income including any tax imposed on or measured by an amount
8 arrived at by deducting expenses from gross income, one or more
9 forms of which expenses are not specifically and directly
10 related to particular transactions.
11 5. "Capital stock tax" means a tax measured in any way by
12 the capital of a corporation considered in its entirety.
13 6. "Gross receipts tax" means a tax, other than a sales tax,
14 which is imposed on or measured by the gross volume of business,
15 in terms of gross receipts or in other terms, and in the
16 determination of which no deduction is allowed which would
17 constitute the tax an income tax.
18 7. "Sales tax" means a tax imposed with respect to the
19 transfer for a consideration of ownership, possession or custody
20 of tangible personal property or the rendering of services
21 measured by the price of the tangible personal property
22 transferred or services rendered and which is required by state
23 or local law to be separately stated from the sales price by the
24 seller, or which is customarily separately stated from the sales
25 price, but does not include a tax imposed exclusively on the
26 sale of a specifically identified commodity or article or class
27 of commodities or articles.
28 8. "Use tax" means a nonrecurring tax, other than a sales
29 tax, which (a) is imposed on or with respect to the exercise or
30 enjoyment of any right or power over tangible personal property
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1 incident to the ownership, possession or custody of that
2 property or the leasing of that property from another including
3 any consumption, keeping retention or other use of tangible
4 personal property and (b) is complementary to a sales tax.
5 9. "Tax" means any income tax, capital stock tax, gross
6 receipts tax, sales tax, use tax and any other tax which has a
7 multistate impact, except that the provisions of Articles III,
8 IV and V shall apply only to the taxes specifically designated
9 therein.
10 Article III
11 Elements of Income Tax Laws
12 Taxpayer Option, State and Local Taxes.
13 1. Any taxpayer subject to an income tax whose income is
14 subject to apportionment and allocation for tax purposes
15 pursuant to the laws of a party state or pursuant to the laws of
16 subdivisions in two or more party state may elect to apportion
17 and allocate his income in the manner provided by the laws of
18 such state or by the laws of such states and subdivisions
19 without reference to this company, or may elect to apportion and
20 allocate in accordance with Article IV. This election for any
21 tax year may be made in all party states or subdivisions thereof
22 or in any one or more of the party states or subdivisions
23 thereof without reference to the election made in the others.
24 For the purposes of this paragraph, taxes imposed by
25 subdivisions shall be considered separately from state taxes and
26 the apportionment and allocation also may be applied to the
27 entire tax base. In no instance wherein Article IV is employed
28 for all subdivisions of a state may the sum of all
29 apportionments and allocations to subdivisions within a state be
30 greater than the apportionment and allocation that would be
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1 assignable to that state if the apportionment or allocation were
2 being made with respect to a state income tax.
3 Taxpayer Option, Short Form.
4 2. Each party state or any subdivision thereof which imposes
5 an income tax may provide by law that any taxpayer required to
6 file a return, whose only activities within the taxing
7 jurisdiction consist of sales and do not include owning or
8 renting real estate or tangible personal property, and whose
9 dollar volume of gross sales made during the tax year within the
10 state or subdivision, as the case may be, is not in excess of
11 $100,000 may elect to report and pay any tax due on the basis of
12 a percentage of such volume and may adopt rates which shall
13 produce a tax which reasonably approximates the tax otherwise
14 due. Each party state and subdivision thereof may make the same
15 election available taxpayers additional to those specified in
16 this paragraph.
17 Coverage.
18 3. Nothing in this article relates to the reporting or
19 payment of any tax other than an income tax.
20 Article IV
21 Division of Income
22 1. As used in this article, unless the context otherwise
23 requires:
24 (a) "Business income" means income arising from transactions
25 and activity in the regular course of the taxpayer's trade or
26 business and includes income from tangible and intangible
27 property if the acquisition, management and disposition of the
28 property constitute integral parts of the taxpayer's regular
29 trade or business operations.
30 (b) "Commercial domicile" means the principal place from
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1 which the trade or business of the taxpayer is directed or
2 managed.
3 (c) "Compensation" means wages, salaries, commissions and
4 any other form of remuneration paid to employees for personal
5 services.
6 (d) "Financial organization" means any bank, trust company,
7 savings bank, industrial bank, land bank, safe deposit company,
8 private banker, savings and loan association, credit union,
9 cooperative bank, small loan company, sales finance company,
10 investment company or any type of insurance company.
11 (e) "Nonbusiness income" means all income other than
12 business income.
13 (f) "Public utility" means any business entity (1) which
14 owns or operates any plant, equipment, property, franchise or
15 license for the transmission of communications, transportation
16 of goods or persons, except by pipeline, or the production,
17 transmission, sale, delivery or furnishing of electricity, water
18 or steam; and (2) whose rates of charges for goods or services
19 have been established or approved by a Federal, state or local
20 government or governmental agency.
21 (g) "Sales" means all gross receipts of the taxpayer not
22 allocated under paragraphs of this article.
23 (h) "State" means any State of the United States, the
24 District of Columbia, the Commonwealth of Puerto Rico, any
25 territory or possession of the United States and any foreign
26 country or political subdivision thereof.
27 (i) "This state" means the state in which the relevant tax
28 return is filed or, in the case of application of this article
29 to the apportionment and allocation of income for local tax
30 purposes, the subdivision or local taxing district in which the
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1 relevant tax return is filed.
2 2. Any taxpayer having income from business activity which
3 is taxable both within and without this state, other than
4 activity as a financial organization or public utility or the
5 rendering of purely personal services by an individual, shall
6 allocate and apportion his net income as provided in this
7 article. If a taxpayer has income from business activity as a
8 public utility but derives the greater percentage of his income
9 from activities subject to this article, the taxpayer may elect
10 to allocate and apportion his entire net income as provided in
11 this article.
12 3. For purposes of allocation and apportionment of income
13 under this article, a taxpayer is taxable in another state if
14 (1) in that state he is subject to a net income tax, a franchise
15 tax measured by net income, a franchise tax for the privilege of
16 doing business or a corporate stock tax, or (2) that state has
17 jurisdiction to subject the taxpayer to a net income tax
18 regardless of whether, in fact the state does or does not.
19 4. Rents and royalties from real or tangible personal
20 property, capital gains, interest, dividends or patent or
21 copyright royalties, to the extent that they constitute
22 nonbusiness income, shall be allocated as provided in paragraphs
23 5 through 8 of this article.
24 5. (a) Net rents and royalties from real property located
25 in this state are allocable to this state.
26 (b) Net rents and royalties from tangible personal property
27 are allocable to this state: (1) if and to the extent that the
28 property is utilized in this state, or (2) in their entirety if
29 the taxpayer's commercial domicile is in this state and the
30 taxpayer is not organized under the laws of or taxable in the
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1 state in which the property is utilized.
2 (c) The extent of utilization of tangible personal property
3 in a state is determined by multiplying the rents and royalties
4 by a fraction, the numerator of which is the number of days of
5 physical location of the property in the state during the rental
6 or royalty period in the taxable year and the denominator of
7 which is the number of days of physical location of the property
8 everywhere during all rental or royalty periods in the taxable
9 year. If the physical location of the property during the rental
10 or royalty period is unknown or unascertainable by the taxpayer,
11 tangible personal property is utilized in the state in which the
12 property was located at the time the rental or royalty payer
13 obtained possession.
14 6. (a) Capital gains and losses from sales of real property
15 located in this state are allocable to this state.
16 (b) Capital gains and losses from sales of tangible personal
17 property are allocable to this state if (1) the property had a
18 situs in this state at the time of the sale, or (2) the
19 taxpayer's commercial domicile is in this state and the taxpayer
20 is not taxable in the state in which the property had a situs.
21 (c) Capital gains and losses from sales of intangible
22 personal property are allocable to this state if the taxpayer's
23 commercial domicile is in this state.
24 7. Interest and dividends are allocable to this state if the
25 taxpayer's commercial domicile is in this state.
26 8. (a) Patent and copyright royalties are allocable to this
27 state: (1) if and to the extent that the patent or copyright is
28 utilized by the payer in this state, or (2) if and to the extent
29 that the patent or copyright is utilized by the payer in a state
30 in which the taxpayer is not taxable and the taxpayer's
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1 commercial domicile is in this state.
2 (b) A patent is utilized in a state to the extent that it is
3 employed in production, fabrication, manufacturing or other
4 processing in the state or to the extent that a patented product
5 is produced in the state. If the basis of receipts from patent
6 royalties does not permit allocation to states or if the
7 accounting procedures do not reflect states of utilization, the
8 patent is utilized in the state in which the taxpayer's
9 commercial domicile is located.
10 (c) A copyright is utilized in a state to the extent that
11 printing or other publication originates in the state. If the
12 basis of receipts from copyright royalties does not permit
13 allocation to states or if the accounting procedures does not
14 reflect states of utilization, the copyright is utilized in the
15 state in which the taxpayer's commercial domicile is located.
16 9. All business income shall be apportioned to this state by
17 multiplying the income by a fraction, the numerator of which is
18 the property factor plus the payroll factor plus the sales
19 factor and the denominator of which is three.
20 10. The property factor is a fraction, the numerator of
21 which is the average value of the taxpayer's real and tangible
22 personal property owned or rented and used in this state during
23 the tax period and the denominator of which is the average value
24 of all the taxpayers's real and tangible personal property owned
25 or rented and used during the tax period.
26 11. Property owned by the taxpayer is valued at its original
27 cost. Property rented by the taxpayer is valued at eight times
28 the net annual rental rate. Net annual rental rate is the annual
29 rental rate paid by the taxpayer less than annual rental rate
30 received by the taxpayer from subrentals.
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1 12. The average value of property shall be determined by
2 averaging the values at the beginning and ending of the tax
3 period but the tax administrator may require the averaging of
4 monthly values during the tax period if reasonably required to
5 reflect properly the average value of the taxpayer's property.
6 13. The payroll factor is a fraction, the numerator of which
7 is the total amount paid in this state during the tax period by
8 the taxpayer for compensation and the denominator of which is
9 the total compensation paid everywhere during the tax period.
10 14. Compensation is paid in this state if:
11 (a) the individual's service is performed entirely within
12 the state;
13 (b) the individual's service is performed both within and
14 without the state, but the service performed without the state
15 is incidental to the individual's service within the state; or
16 (c) some of the service is performed in the state and (1)
17 the base of operations or, if there is no base of operations,
18 the place from which the service is directed or controlled is in
19 the state, or (2) the base of operations or the place from which
20 the service is directed or controlled is not in any state in
21 which some part of the service is performed, but the
22 individual's residence is in this state.
23 15. The sales factor is a fraction, the numerator of which
24 is the total sales of the taxpayer in this state during the tax
25 period and the denominator of which is the total sales of the
26 taxpayer everywhere during the tax period.
27 16. Sales of tangible personal property are in this state
28 if:
29 (a) the property is delivered or shipped to a purchaser,
30 other than the United States Government, within this state
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1 regardless of the f.o.b. point or other conditions of the sale;
2 or
3 (b) the property is shipped from an office, store,
4 warehouse, factory or other place of storage in this state and
5 (1) the purchaser is the United States Government or (2) the
6 taxpayer is not taxable in the state of the purchaser.
7 17. Sales, other than sales of tangible property, are in
8 this state if:
9 (a) the income-producing activity is performed in this
10 state; or
11 (b) the income-producing activity is performed both in and
12 outside this state and a greater proportion of the income-
13 producing activity is performed in this state than in any other
14 state, based on cost of performance.
15 18. If the allocation and apportionment provisions of this
16 article do not fairly represent the extent of the taxpayer's
17 business activity in this state, the taxpayer may petition for
18 or the tax administrator may require, in respect to all or any
19 part of the taxpayer's business activity, if reasonable:
20 (a) separate accounting;
21 (b) the exclusion of any one or more of the factors;
22 (c) the inclusion of one or more additional factors which
23 will fairly represent the taxpayer's business activity in this
24 state; or
25 (d) the employment of any other method to effectuate an
26 equitable allocation and apportionment of the taxpayer's income.
27 Article V
28 Elements of Sales and Use Tax Laws
29 Tax Credit
30 1. Each purchaser liable for a use tax on tangible personal
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1 property shall be entitled to full credit for the combined
2 amount or amounts of legally imposed sales or use taxes paid by
3 him with respect to the same property to another state and any
4 subdivision thereof. The credit shall be applied first against
5 the amount of any use tax due the state and any unused portion
6 of the credit shall then be applied against the amount of any
7 use tax due a subdivision.
8 Exemption Certificates, Vendors May Rely
9 2. Whenever a vendor receives and accepts in good faith from
10 a purchaser a resale or other exemption certificate or other
11 written evidence of exemption authorized by the appropriate
12 state or subdivision taxing authority, the vendor shall be
13 relieved of liability for a sales or use tax with respect to the
14 transaction.
15 Article VI
16 The Commission
17 Organization and Management
18 1. (a) The Multistate Tax Commission is hereby established.
19 It shall be composed of one member from each party state who
20 shall be the head of the state agency charged with the
21 administration of the types of taxes to which this compact
22 applies. If there is more than one such agency, the state shall
23 provide by law for the selection of the commission member from
24 the heads of the relevant agencies. State law may provide that a
25 member of the commission be represented by an alternate but only
26 if there is on file with the commission written notification of
27 the designation and identity of the alternate. The attorney
28 general of each party state or his designee, or other counsel if
29 the laws of the party state specifically provide, shall be
30 entitled to attend the meetings of the commission, but shall not
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1 vote. Such attorneys general, designees or other counsel shall
2 receive all notices of meetings required under paragraph 1(e) of
3 this article.
4 (b) Each party state shall provide by law for the selection
5 of representatives from its subdivisions affected by this
6 compact to consult with the commission member from that state.
7 (c) Each member shall be entitled to one vote. The
8 commission shall not act unless a majority of the members are
9 present and no action shall be binding unless approved by a
10 majority of the total number of members.
11 (d) The commission shall adopt an official seal to be used
12 as it may provide.
13 (e) The commission shall hold an annual meeting and such
14 other regular meetings as its bylaws may provide and such
15 special meetings as its executive committee may determine. The
16 commission bylaws shall specify the dates of the annual and any
17 other regular meetings, and shall provide for the giving of
18 notice of annual, regular and special meetings. Notices of
19 special meetings shall include the reasons therefor and an
20 agenda of the items to be considered.
21 (f) The commission shall elect annually, from among its
22 members, a chairman, a vice chairman and a treasurer. The
23 commission shall appoint an executive director who shall serve
24 at its pleasure, and it shall fix his duties and compensation.
25 The executive director shall be secretary of the commission. The
26 commission shall make provision for the bonding of such of its
27 officers and employees as it may deem appropriate.
28 (g) Irrespective of the civil service, personnel or other
29 merit system laws of any party state, the executive director
30 shall appoint or discharge such personnel as may be necessary
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1 for the performance of the functions of the commission and shall
2 fix their duties and compensation. The commission bylaws shall
3 provide for personnel policies and programs.
4 (h) The commission may borrow, accept or contract for the
5 services of personnel from any state, the United States or any
6 other governmental entity.
7 (i) The commission may accept for any of its purposes and
8 functions any and all donations and grants of money, equipment,
9 supplies, materials and services, conditional or otherwise, from
10 any governmental entity, and may utilize and dispose of the
11 same.
12 (j) The commission may establish one or more offices for the
13 transacting of its business.
14 (k) The commission shall adopt bylaws for the conduct of its
15 business. The commission shall publish its bylaws in convenient
16 form and shall file a copy of the bylaws and any amendments
17 thereto with the appropriate agency or officer in each of the
18 party states.
19 (l) The commission annually shall make to the Governor and
20 legislature of each party state a report covering its activities
21 for the preceding year. Any donation or grant accepted by the
22 commission or services borrowed shall be reported in the annual
23 report of the commission, and shall include the nature, amount
24 and conditions, if any, of the donation, gift, grant or services
25 borrowed and the identity of the donor or lender. The commission
26 may make additional reports as it may deem desirable.
27 Committees
28 2. (a) To assist in the conduct of its business when the
29 full commission is not meeting, the commission shall have an
30 executive committee of seven members, including the chairman,
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1 vice chairman, treasurer and four other members elected annually
2 by the commission. The executive committee, subject to the
3 provisions of this compact and consistent with the policies of
4 the commission, shall function as provided in the bylaws of the
5 commission.
6 (b) The commission may establish advisory and technical
7 committees, membership on which may include private persons and
8 public officials, in furthering any of its activities. Such
9 committees may consider any matter of concern to the commission,
10 including problems of special interest to any party state and
11 problems dealing with particular types of taxes.
12 (c) The commission may establish such additional committees
13 as its bylaws may provide.
14 Powers
15 3. In addition to powers conferred elsewhere in this
16 compact, the commission shall have power to:
17 (a) Study state and local tax systems and particular types
18 of state and local taxes.
19 (b) Develop and recommend proposals for an increase in
20 uniformity or compatibility of state and local tax laws with a
21 view toward encouraging the simplification and improvement of
22 state and local tax law and administration.
23 (c) Compile and publish information as in its judgment would
24 assist the party states in implementation of the compact and
25 taxpayers in complying with state and local tax laws.
26 (d) Do all things necessary and incidental to the
27 administration of its functions pursuant to this compact.
28 Finance
29 4. (a) The commission shall submit to the Governor or
30 designated officer or officers of each party state a budget of
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1 its estimated expenditures for such period as may be required by
2 the laws of that state for presentation to the legislature
3 thereof.
4 (b) Each of the commission's budgets of estimated
5 expenditures shall contain specific recommendations of the
6 amounts to be appropriated by each of the party states. The
7 total amount of appropriations requested under any such budget
8 shall be apportioned among the party states as follows: one-
9 tenth in equal shares; and the remainder in proportion to the
10 amount of revenue collected by each party state and its
11 subdivisions from income taxes, capital stock taxes, gross
12 receipts taxes, sale and use taxes. In determining such amounts,
13 the commission shall employ such available public sources of
14 information as, in its judgment, present the most equitable and
15 accurate comparisons among the party states. Each of the
16 commission's budgets of estimated expenditures and requests for
17 appropriations shall indicate the sources used in obtaining
18 information employed in applying the formula contained in this
19 paragraph.
20 (c) The commission shall not pledge the credit of any party
21 state. The commission may meet any of its obligations in whole
22 or in part with funds available to it under paragraph 1(i) of
23 this article: Provided, That the commission takes specific
24 action setting aside such funds prior to incurring any
25 obligation to be met in whole or in part in such manner. Except
26 where the commission makes use of funds available to it under
27 paragraph 1(i), the commission shall not incur any obligation
28 prior to the allotment of funds by the party states adequate to
29 meet the same.
30 (d) The commission shall keep accurate accounts of all
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1 receipts and disbursements. The receipts and disbursements of
2 the commission shall be subject to the audit and accounting
3 procedures established under its bylaws. All receipts and
4 disbursements of funds handled by the commission shall be
5 audited yearly by a certified or licensed public accountant and
6 the report of the audit shall be included in and become part of
7 the annual report of the commission.
8 (e) The accounts of the commission shall be open at any
9 reasonable time for inspection by duly constituted officers of
10 the party states and by any persons authorized by the
11 commission.
12 (f) Nothing contained in this article shall be construed to
13 prevent commission compliance with laws relating to audit or
14 inspection of accounts by or on behalf of any government
15 contributing to the support of the commission.
16 Article VII
17 Uniform Regulations and Forms
18 1. Whenever any two or more party states, or subdivisions of
19 party states, have uniform or similar provisions of law relating
20 to an income tax, capital stock tax, gross receipts tax, sales
21 or use tax, the commission may adopt uniform regulations for any
22 phase of the administration of such law, including assertion of
23 jurisdiction to tax, or prescribing uniform tax forms. The
24 commission may also act with respect to the provisions of
25 Article IV.
26 2. Prior to the adoption of any regulation, the commission
27 shall:
28 (a) As provided in its bylaws, hold at least one public
29 hearing on due notice to all affected party states and
30 subdivisions thereof and to all taxpayers and other persons who
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1 have made timely request of the commission for advance notice of
2 its regulation-making proceedings.
3 (b) Afford all affected party states and subdivisions and
4 interested persons an opportunity to submit relevant written
5 data and views, which shall be considered fully by the
6 commission.
7 3. The commission shall submit any regulations adopted by it
8 to the appropriate officials to all party states and
9 subdivisions to which they might apply. Each such state and
10 subdivision shall consider any such regulation for adoption in
11 accordance with its own laws and procedures.
12 Article VIII
13 Interstate Audits
14 1. Any party state or subdivision thereof desiring to make
15 or participate in an audit of any accounts, books, papers,
16 records or other documents may request the commission to perform
17 the audit on its behalf. In responding to the request, the
18 commission shall have access to and may examine, at any
19 reasonable time, such accounts, books, papers, records and other
20 documents and any relevant property or stock of merchandise. The
21 commission may enter into agreements with party states or their
22 subdivisions for assistance in performance of the audit. The
23 commission shall make charges, to be paid by the state or local
24 government or governments for which it performs the service, for
25 any audits performed by it in order to reimburse itself for the
26 actual costs incurred in making the audit.
27 2. The commission may require the attendance of any person
28 within the state where it is conducting an audit or part thereof
29 at a time and place fixed by it within such state for the
30 purpose of giving testimony with respect to any account, book,
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1 paper, document, other record, property or stock of merchandise
2 being examined in connection with the audit. If the person is
3 not within the jurisdiction, he may be required to attend for
4 such purpose at any time and place fixed by the commission
5 within the state of which he is a resident: Provided, That such
6 state has adopted this article.
7 3. The commission may apply to any court having power to
8 issue compulsory process for orders in aid of its powers and
9 responsibilities pursuant to this article and any and all such
10 courts shall have jurisdiction to issue such orders. Failure of
11 any person to obey any such order shall be punishable as
12 contempt of the issuing court. If the party or subject matter on
13 account of which the commission seeks an order is within the
14 jurisdiction of the court to which application is made, such
15 application may be to a court in the state or subdivision on
16 behalf of which the audit is being made or a court in the state
17 in which the object of the order being sought is situated. The
18 provisions of this paragraph apply only to courts in a state
19 that has adopted this article.
20 4. The commission may decline to perform any audit requested
21 if it finds that its available personnel or other resources are
22 insufficient for the purpose or that, in the terms requested,
23 the audit is impracticable of satisfactory performance. If the
24 commission, on the basis of its experience, has reason to
25 believe that an audit of a particular taxpayer, either at a
26 particular time or on a particular schedule, would be of
27 interest to a number of party states or their subdivisions, it
28 may offer to make the audit or audits, the offer to be
29 contingent on sufficient participation therein as determined by
30 the commission.
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1 5. Information obtained by any audit pursuant to this
2 article shall be confidential and available only for tax
3 purposes to party states, their subdivisions or the United
4 States. Availability of information shall be in accordance with
5 the laws of the states or subdivisions on whose account the
6 commission performs the audit, and only through the appropriate
7 agencies or officers of such states or subdivisions. Nothing in
8 this article shall be construed to require any taxpayer to keep
9 records for any period not otherwise required by law.
10 6. Other arrangements made or authorized pursuant to law for
11 cooperative audit by or on behalf of the party states or any of
12 their subdivisions are not superseded or invalidated by this
13 article.
14 7. In no event shall the commission make any charge against
15 a taxpayer for an audit.
16 8. As used in this article, "tax," in addition to the
17 meaning ascribed to it in Article II, means any tax or license
18 fee imposed in whole or in part for revenue purposes.
19 Article IX
20 Entry Into Force and Withdrawal
21 1. This compact shall enter into force when enacted into law
22 by any seven states. Thereafter, this compact shall become
23 effective as to any other state upon its enactment thereof. The
24 commission shall arrange for notification of all party states
25 whenever there is a new enactment of the compact.
26 2. Any party state may withdraw from this compact by
27 enacting a statute repealing the same. No withdrawal shall
28 affect any liability already incurred by or changeable to a
29 party state prior to the time of such withdrawal.
30 3. No proceeding commenced before an arbitration board prior
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1 to the withdrawal of a state and to which the withdrawing state
2 or any subdivision thereof is a party shall be discontinued or
3 terminated by the withdrawal, nor shall the board thereby lose
4 jurisdiction over any of the parties to the proceeding necessary
5 to make a binding determination therein.
6 Article X
7 Effect on Other Laws and Jurisdiction
8 Nothing in this compact shall be construed to:
9 (a) Affect the power of any state or subdivision thereof to
10 fix rates of taxation.
11 (b) Apply to any tax or fixed fee imposed for the
12 registration of a motor vehicle or any tax on motor fuel, other
13 than a sales tax: Provided, That the definition of "tax" in
14 paragraph 8 of Article VIII may apply for the purposes of that
15 article and the commission's powers of study and recommendation
16 pursuant to paragraph 3 of Article VI may apply.
17 (c) Withdraw or limit the jurisdiction of any state or local
18 court or administrative officer or body with respect to any
19 person, corporation or other entity or subject matter, except to
20 the extent that such jurisdiction is expressly conferred by or
21 pursuant to this compact upon another agency or body.
22 (d) Supersede or limit the jurisdiction of any court of the
23 United States.
24 Article XI
25 Construction and Severability
26 This compact shall be liberally construed so as to effectuate
27 the purposes thereof. The provisions of this compact shall be
28 severable and if any phrase, clause, sentence or provision of
29 this compact is declared to be contrary to the constitution of
30 any state or of the United States or the applicability thereof
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1 to any government, agency, person or circumstance is held
2 invalid, the validity of the remainder of this compact and the
3 applicability thereof to any government, agency, person or
4 circumstance shall not be affected thereby. If this compact
5 shall be held contrary to the constitution of any state
6 participating therein, the compact shall remain in full force
7 and effect as to the remaining party states and in full force
8 and effect as the state affected as to all severable matters.
9 Section 2. The Secretary of Revenue shall represent this
10 State on the Multistate Tax Commission.
11 Section 3. In the event that local governments may be
12 authorized to impose taxes affected by this compact, the
13 Governor, after consultation with representatives of local
14 governments, shall appoint one representative of each class of
15 local government so authorized to consult with the member of the
16 commission representing this State. The member of the commission
17 representing this State shall consult regularly with these
18 appointees, in accordance with paragraph 1(b) of Article VI of
19 the compact.
20 Section 4. There is hereby established the Multistate Tax
21 Compact Advisory Committee composed of the member of the
22 Multistate Tax Commission representing this State, the Attorney
23 General or his designee, and two members of the Senate,
24 appointed by the President pro tempore, one of whom shall be
25 from the majority party and one of whom shall be from the
26 minority party and two members of the House of Representatives,
27 appointed by the Speaker, one of whom shall be from the majority
28 party and one of whom shall be from the minority party. The
29 chairman shall be the member of the commission representing this
30 State. The committee shall meet on the call of its chairman or
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1 at the request of a majority of its members, but in any event it
2 shall meet not less than three times in each year. The committee
3 may consider any and all matters relating to recommendations of
4 the Multistate Tax Commission and the activities of the members
5 in representing this State thereon.
6 Section 5. Article VIII of the Multistate Tax Compact
7 relating to interstate audits shall be in force in and with
8 respect to this State.
9 Section 6. This act shall take effect July 1, 1983.
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