MTC Uniformity Committee update - hey partner, let’s tax your digital goods and services

Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLPOn April 27-28, the Multistate Tax Commission’s Uniformity Committee (UC) held its spring meeting virtually. In addition to voting to adopt a UC Charter, the following uniformity projects were advanced:

  • Partnership Project—The UC approved a recommendation by the Standing Subcommittee to develop a model or uniform state law on partnership taxation. Specifically, the working group will consider issues related to multijurisdictional partnerships operating income (including nexus and sourcing issues), issues related to the sale of a partnership interest, certain administrative and informational reporting issues, and partnership level taxes generally.
  • Taxation of Digital Goods and Services—The UC heard a presentation from members of the Washington Department of Revenue about the Department’s implementation of Washington’s infamous 2010 legislation that expanded the sales and use to base (and adjusted the Business and Occupation Tax classifications) to include a wide variety of “digital products,” which include digital goods, digital automated services, and digital codes. The Department staff discussed specific challenges with the taxation of these goods and services, while giving a ringing endorsement for the broadening of the base to digital goods and services. Following the presentation, the UC approved a motion made by Michael Fatale (Massachusetts Department of Revenue) for the Standing Subcommittee to consider this as a possible uniformity project. Considering Washington’s expansive taxation of digital goods and services and the expectation that the Washington Department will have a very active (likely leadership) role in this project, engagement by the business community will be key. We’ll be there!

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

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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