TEI Advocates Need to Update State Statutes Governing the Reporting Federal Income Adjustments at the National Conference of State Legislatures Meeting (June 15, 2017)

On June 15, 2017, TEI Tax Counsel Pilar Mata, along with Fred Nicely and Nikki Dobay of the Council on State Taxation, April Nevarez on behalf of the Institute for Professionals in Taxation, Jaye Calhoun on behalf of the ABA’s State and Local Tax Committee, and Tom Shimkin of the Multistate Tax Commission, presented at the National Conference of State Legislatures Taskforce on State and Local Taxation. The panel discussed the need for state legislators to update state statutes governing the reporting of federal income adjustments.

A working group consisting of members of TEI, COST, the ABA’s State and Local Tax Committee, and the AICPA (collectively, the Interested Parties) has been working on changes to the MTC’s 2003 model statute addressing the reporting of federal adjustments. The Interested Parties first presented an update to the model statute to the MTC at its December 2016 meeting and revised the draft in June 2017 to address adjustments arising under the federal centralized partnership audit regime, which will go into effect for tax years beginning after December 31, 2017. At the NCSL meeting, the panel provided an overview of the Interested Parties’ proposal, outlined how various adjustments would be reported to states under the proposal, and answered state legislators’ questions. The Interested Parties are soliciting feedback on the draft model statute to ensure that such provisions are acceptable to states and taxpayers alike.