National Conference of State Legislatures to Tackle Key State Tax Policy Questions

by McDermott Will & Emery

The National Conference of State Legislatures’ (NCSL) Executive Committee Task Force on State and Local Taxation has expanded its scope to include all significant tax policy issues facing the states.  As part of its expanded scope, the task force has met with industry representatives to identify tax policy topics that would benefit from the task force’s consideration. Companies with a multi-state presence and concern about state tax policy have found participation in task force meetings beneficial to assisting legislator understanding of complex tax issues.

The National Conference of State Legislatures’ (NCSL) Executive Committee Task Force on State and Local Taxation has expanded its scope to include key issues of state tax policy.  The task force— formerly known as the NCSL Executive Committee Task Force on State and Local Taxation of Communications and Electronic Commerce—has been directed by the organization’s Executive Committee to expand its scope to address a broad range of tax policy concerns facing the states.  

A bipartisan organization comprising legislators from all 50 states, U.S. territories and the District of Columbia, the NCSL serves as a forum for an exchange of ideas on various aspects of state governance and represents state legislatures before Congress.  The task force was formed in April 1999 primarily to study electronic commerce and related issues, but in recent years began playing an active role in promoting good tax policy in the area of digital taxation and cloud computing.

The task force’s new scope of responsibility includes all significant tax policy issues facing the states.  Expected to be tackled are combined corporate income tax reporting, contingent fee audits, qui tam liability, independent tax tribunals, the Multistate Tax Commission’s proposed UDITPA rewrite, pass-through taxation, financial institution and insurance company taxation, unclaimed property and digital and cloud taxation issues.  

Educating Legislators

On February 18, 2013, a letter was sent to interested industry representatives by task force co-chairs announcing the change to the task force’s name and scope of responsibility.  The letter also noted the important role the task force plays in educating legislators on the key tax policy issues facing the states:

The Task Force has endeavored to maintain state sovereignty while acknowledging the need for a tax system that can work across state lines.  Our success has been due to our ability to regularly educate state legislators about these issues through meetings, seminars and technical assistance to legislatures.  In turn, it has become one of the most significant forums for discussion and development of tax policy in the states.

As part of its expanded scope, the task force recently met with various industry representatives to identify tax policy topics that would benefit from the task force’s consideration.  The NCSL also noted future plans to address topics such as state tax reform, communications tax reform, unclaimed property, the taxation of advertising services, online travel taxes, credit card surcharges and state tax expenditures (exemptions and incentives).  Additionally, the task force plans to hold educational sessions on the impact state tax policy has on business location and expansion decisions.

Industry Participation Critical to Task Force’s Success

Industry representatives frequently appear before the task force to educate member legislators on various topics under consideration.  This forum, with open discussion and an opportunity for lawmakers to ask critical questions of experts on the topic at hand, has proven to be a valuable incubator for sound tax policy debate.  With the expanded scope of those discussions endorsed by the NCSL Executive Committee, the importance of those meetings will certainly grow.  Companies with a multi-state presence and concern about state tax policy have found participation in task force meetings to be an excellent way to assist legislator understanding of complex tax issues.

The McDermott Difference

In response to the task force’s expanded policy focus, McDermott Will & Emery has formed the State Tax Policy Coalition (Coalition) to engage on behalf of its members.  Clients that care about state tax policy should have a seat at the table, and participation in the Coalition ensures the collective voice of its members will be heard.  The Coalition will serve as a conduit for companies to engage NCSL and to influence the national state tax policy discussion with the goal of achieving better tax policy.  The task force’s next meeting will likely take place in Boston May 30–June 1, 2013.  To learn more, read more here.


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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