Update from the MTC Uniformity Committee – Hey partner, let’s tax your digital goods and services | Eversheds Sutherland (United States) LLP

On April 27-28, the Multistate Tax Commission Uniformity Committee (UC) virtually held its spring meeting. In addition to voting for the adoption of a UC charter, the following uniformity projects have been put forward:

  • Partnership project– The CU approved a recommendation from the standing subcommittee to develop a model or uniform state law on partnership taxation. Specifically, the working group will examine issues related to operating income of multi-jurisdictional partnerships (including linkage and procurement issues), issues related to selling a stake in a partnership, some reporting issues administrative and informational and taxes at the level of the partnership in general.
  • Taxation of digital goods and servicess — The UC heard a presentation from members of the Washington Department of Revenue on the Department’s implementation of the infamous 2010 Washington legislation that extended grassroots sales and use (and adjusted business and professional tax classifications) to include a wide variety of “digital product taxes”, which include digital goods, digital automated services, and digital codes. Department staff discussed the specific challenges of taxing these goods and services, while giving resounding support to broadening the base to digital goods and services. Following the presentation, UC approved a motion by Michael Fatale (Massachusetts Department of Revenue) that the standing subcommittee consider this a possible uniformity project. Given the exponential taxation of digital goods and services by Washington and the expectation that the Washington Department will play a very active (possibly leadership) role in this project, engagement of the business community will be essential. We will be there!

The UC will meet virtually in July, but hope to meet in person for its fall meeting in Alexandria, Virginia.

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