TEI holds inaugural liaison meeting with Multistate Tax Commission; April 27, 1995 - Liaison Meeting Special

Tax Executive, The, May-June, 1995

In response to a question, Mr. Leathers said that the MTC and the Federation of Tax Administrators (FTA) work together in many ways though the focus of the two organizations was very different. He explained that the FTA is oriented more toward policy matters while the MTC is calibrated toward providing regulatory guidance and conducting audits of taxpayers. Mr. Bucks added that the FTA has a broad research, education, and policy orientation encompassing all aspects of state and local taxation. The FTA, he said, is much more specialized in the taxation of interstate commerce.

In response to a question, Ms. Burke compared the roles of TEI and the Committee on State Taxation (COST), whose membership overlaps with the companies represented by TEI's membership. She explained that COST was devoted exclusively to state tax matters, and generally was more active in state legislative and tax litigation matters than TEI. TEI, she said, is concerned with the entire spectrum of federal, international, and state taxation. She added that, whereas TEI is composed of individual members and COST has corporate members, both organizations focus on the taxation of business enterprises. Mr. Baldwin reiterated that the primary goal of TEI is the overall education and representation of the tax executive, whereas COST specialized exclusively in state and local tax matters. TEI, he explained, "picked its spots" in state and local tax matters.

Refund of Unconstitutionally Collected Taxes

Ms. Burke summarized the Institute's involvement in various U.S. Supreme Court state tax cases and stated that the Institute was adamant concerning the refund of unconstitutionally collected state taxes. Following further discussion of the issue of retroactive relief versus the retroactive imposition of additional state taxes (e.g., if the Supreme Court were to expand the scope of permissible state taxation), Mr. Bucks said that the MTC had conducted research into various forms of "meaningful backward-looking relief" that may be afforded to taxpayers upon a court's declaring a statute invalid. In response to a question, Mr. Friedman said that the research required "freshening up" prior to its release to TEI and other taxpayer groups. Mr. Shewbridge suggested that the project could be meaningfully discussed at the MTC's annual "Dialogue Day" in the fall.

Mr. Anderson suggested that regardless of whether the business taxpayers and the States agreed on the issue of refunds of unconstitutionally collected state taxes, there should be sufficient common ground between the two groups to productively discuss a wide range of (potentially less contentious) substantive and procedural matters. Mr. Bucks agreed, asserting that the MTC had in the past taken up the TEI banner, for example, in respect of uniform protest periods.

MTC Rulemaking Procedures

Mr. Bucks averred that an unfortunate perception is created when the press casts a draft staff document as an "MTC proposal." He explained that the MTC, as a public agency, is required to circulate drafts of staff documents, inviting public comment. Proposals are issued, he said, to obtain comments and feedback rather than position papers. The staff draft of a proposal, he added, is often revised following public comment. Moreover, when the MTC Executive Committee reviews a proposal to consider whether to hold a public hearing, the draft is often sent back to the staff for further issue development. After a public hearing is held, the document may be revised further before it is circulated to the States for their review. If a majority of States indicate that they would likely adopt the proposal, he said, the proposal is then forwarded to the Commission for a vote of the entire membership. A regulation is formally adopted only where a majority of States--with votes weighted by population--approves the proposal. The MTC, he concluded, in keeping with its mission of ensuring uniform treatment of interstate commerce, strives to achieve as near a consensus as possible before issuing a regulation.