AICPA on MTC's reporting-options proposal

Over the past few months, the Multistate Tax Commission (MTC) has been considering a proposal, "Uniformity Proposal Concerning Reporting of Pass-Through Entities," which, according to the understandings of the AICPA's State and Local Tax Technical Resource Panel, (TRP), intends to: 1. reduce the cost of collecting tax on nonresident individuals by relieving the administrative burden on both taxpayer and state taxing authorities through a composite-filing process, 2, respond to tax practitioners' request to pursue composite-filing uniformity among the states, and 3. eliminate a perceived loss of state revenue, based on anecdotal information that taxpayers are engaging in one-time transaction using flow-through entities that allow nonresidents to avoid state taxes on the transaction's profits or distributions.