TAX CODE
TITLE 2. STATE TAXATION
SUBTITLE D. COMPACTS AND UNIFORM LAWS
CHAPTER 141. MULTISTATE TAX COMPACT
Sec. 141.001. ADOPTION OF MULTISTATE TAX COMPACT. The
Multistate Tax Compact is adopted and entered into with all
jurisdictions legally adopting it to read as follows:
MULTISTATE TAX COMPACT
ARTICLE I. PURPOSES
The purposes of this compact are to:
1. Facilitate proper determination of state and local tax
liability of multistate taxpayers, including the equitable
apportionment of tax bases and settlement of apportionment
disputes.
2. Promote uniformity or compatibility in significant components
of tax systems.
3. Facilitate taxpayer convenience and compliance in the filing
of tax returns and in other phases of tax administration.
4. Avoid duplicative taxation.
ARTICLE II. DEFINITIONS
As used in this compact:
1. "State" means a state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
possession of the United States.
2. "Subdivision" means any governmental unit or special district
of a state.
3. "Taxpayer" means any corporation, partnership, firm,
association, governmental unit or agency or person acting as a
business entity in more than one state.
4. "Income tax" means a tax imposed on or measured by net income
including any tax imposed on or measured by an amount arrived at
by deducting expenses from gross income, one or more forms of
which expenses are not specifically and directly related to
particular transactions.
5. "Capital stock tax" means a tax measured in any way by the
capital of a corporation considered in its entirety.
6. "Gross receipts tax" means a tax, other than a sales tax,
which is imposed on or measured by the gross volume of business,
in terms of gross receipts or in other terms, and in the
determination of which no deduction is allowed which would
constitute the tax an income tax.
7. "Sales tax" means a tax imposed with respect to the transfer
for a consideration of ownership, possession or custody of
tangible personal property or the rendering of services measured
by the price of the tangible personal property transferred or
services rendered and which is required by state or local law to
be separately stated from the sales price by the seller, or which
is customarily separately stated from the sales price, but does
not include a tax imposed exclusively on the sale of a
specifically identified commodity or article or class of
commodities or articles.
8. "Use tax" means a nonrecurring tax, other than a sales tax,
which (a) is imposed on or with respect to the exercise or
enjoyment of any right or power over tangible personal property
incident to the ownership, possession or custody of that property
or the leasing of that property from another including any
consumption, keeping, retention, or other use of tangible
personal property and (b) is complementary to a sales tax.
9. "Tax" means an income tax, capital stock tax, gross receipts
tax, sales tax, use tax, and any other tax which has a multistate
impact, except that the provisions of Articles III, IV and V of
this compact shall apply only to the taxes specifically
designated therein and the provisions of Article IX of this
compact shall apply only in respect to determinations pursuant to
Article IV.
ARTICLE III. ELEMENTS OF INCOME TAX LAWS
Taxpayer Option, State and Local Taxes
1. Any taxpayer subject to an income tax whose income is subject
to apportionment and allocation for tax purposes pursuant to the
laws of a party state or pursuant to the laws of subdivisions in
two or more party states may elect to apportion and allocate his
income in the manner provided by the laws of such state or by the
laws of such states and subdivisions without reference to this
compact, or may elect to apportion and allocate in accordance
with Article IV. This election for any tax year may be made in
all party states or subdivisions thereof or in any one or more of
the party states or subdivisions thereof without reference to the
election made in the others. For the purposes of this paragraph,
taxes imposed by subdivisions shall be considered separately from
state taxes and the apportionment and allocation also may be
applied to the entire tax base. In no instance wherein Article IV
is employed for all subdivisions of a state may the sum of all
apportionments and allocations to subdivisions within a state be
greater than the apportionment and allocation that would be
assignable to that state if the apportionment or allocation were
being made with respect to a state income tax.
Taxpayer Option, Short Form
2. Each party state or any subdivision thereof which imposes an
income tax shall provide by law that any taxpayer required to
file a return, whose only activities within the taxing
jurisdiction consist of sales and do not include owning or
renting real estate or tangible personal property, and whose
dollar volume of gross sales made during the tax year within the
state or subdivision, as the case may be, is not in excess of
$100,000 may elect to report and pay any tax due on the basis of
a percentage of such volume, and shall adopt rates which shall
produce a tax which reasonably approximates the tax otherwise
due. The Multistate Tax Commission, not more than once in five
years, may adjust the $100,000 figure in order to reflect such
changes as may occur in the real value of the dollar, and such
adjusted figure, upon adoption by the commission, shall replace
the $100,000 figure specifically provided herein. Each party
state and subdivision thereof may make the same election
available to taxpayers additional to those specified in this
paragraph.
Coverage
3. Nothing in this article relates to the reporting or payment of
any tax other than an income tax.
ARTICLE IV. DIVISION OF INCOME
1. As used in this article, unless the context otherwise
requires:
(a) "Business income" means income arising from transactions and
activity in the regular course of the taxpayer's trade or
business and includes income from tangible and intangible
property if the acquisition, management, and disposition of the
property constitute integral parts of the taxpayer's regular
trade or business operations.
(b) "Commercial domicile" means the principal place from which
the trade or business of the taxpayer is directed or managed.
(c) "Compensation" means wages, salaries, commissions and any
other form of remuneration paid to employees for personal
services.
(d) "Financial organization" means any bank, trust company,
savings bank, industrial bank, land bank, safe deposit company,
private banker, savings and loan association, credit union,
cooperative bank, small loan company, sales finance company,
investment company, or any type of insurance company.
(e) "Nonbusiness income" means all income other than business
income.
(f) "Public utility" means any business entity (1) which owns or
operates any plant, equipment, property, franchise, or license
for the transmission of communications, transportation of goods
or persons, except by pipe line, or the production, transmission,
sale, delivery, or furnishing of electricity, water or steam; and
(2) whose rates of charges for goods or services have been
established or approved by a federal, state or local government
or governmental agency.
(g) "Sales" means all gross receipts of the taxpayer not
allocated under paragraphs of this article.
(h) "State" means any state of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, and any foreign country or
political subdivision thereof.
(i) "This state" means the state in which the relevant tax
return is filed or, in the case of application of this article to
the apportionment and allocation of income for local tax
purposes, the subdivision or local taxing district in which the
relevant tax return is filed.
2. Any taxpayer having income from business activity which is
taxable both within and without this state, other than activity
as a financial organization or public utility or the rendering of
purely personal services by an individual, shall allocate and
apportion his net income as provided in this article. If a
taxpayer has income from business activity as a public utility
but derives the greater percentage of his income from activities
subject to this article, the taxpayer may elect to allocate and
apportion his entire net income as provided in this article.
3. For purposes of allocation and apportionment of income under
this article, a taxpayer is taxable in another state if (1) in
that state he is subject to a net income tax, a franchise tax
measured by net income, a franchise tax for the privilege of
doing business, or a corporate stock tax, or (2) that state has
jurisdiction to subject the taxpayer to a net income tax
regardless of whether, in fact, the state does or does not.
4. Rents and royalties from real or tangible personal property,
capital gains, interest, dividends or patent or copyright
royalties, to the extent that they constitute nonbusiness income,
shall be allocated as provided in paragraphs 5 through 8 of this
article.
5. (a) Net rents and royalties from real property located in this
state are allocable to this state.
(b) Net rents and royalties from tangible personal property are
allocable to this state: (1) if and to the extent that the
property is utilized in this state, or (2) in their entirety if
the taxpayer's commercial domicile is in this state and the
taxpayer is not organized under the laws of or taxable in the
state in which the property is utilized.
(c) The extent of utilization of tangible personal property in a
state is determined by multiplying the rents and royalties by a
fraction, the numerator of which is the number of days of
physical location of the property in the state during the rental
or royalty period in the taxable year and the denominator of
which is the number of days of physical location of the property
everywhere during all rental or royalty periods in the taxable
year. If the physical location of the property during the rental
or royalty period is unknown or unascertainable by the taxpayer,
tangible personal property is utilized in the state in which the
property was located at the time the rental or royalty payer
obtained possession.
6. (a) Capital gains and losses from sales of real property
located in this state are allocable to this state.
(b) Capital gains and losses from sales of tangible personal
property are allocable to this state if (1) the property had a
situs in this state at the time of the sale, or (2) the
taxpayer's commercial domicile is in this state and the taxpayer
is not taxable in the state in which the property had a situs.
(c) Capital gains and losses from sales of intangible personal
property are allocable to this state if the taxpayer's commercial
domicile is in this state.
7. Interest and dividends are allocable to this state if the
taxpayer's commercial domicile is in this state.
8. (a) Patent and copyright royalties are allocable to this
state: (1) if and to the extent that the patent or copyright is
utilized by the payer in this state, or (2) if and to the extent
that the patent or copyright is utilized by the payer in a state
in which the taxpayer is not taxable and the taxpayer's
commercial domicile is in this state.
(b) A patent is utilized in a state to the extent that it is
employed in production, fabrication, manufacturing, or other
processing in the state or to the extent that a patented product
is produced in the state. If the basis of receipts from patent
royalties does not permit allocation to states or if the
accounting procedures do not reflect states of utilization, the
patent is utilized in the state in which the taxpayer's
commercial domicile is located.
(c) A copyright is utilized in a state to the extent that
printing or other publication originates in the state. If the
basis of receipts from copyright royalties does not permit
allocation to states or if the accounting procedures do not
reflect states of utilization, the copyright is utilized in the
state in which the taxpayer's commercial domicile is located.
9. All business income shall be apportioned to this state by
multiplying the income by a fraction, the numerator of which is
the property factor plus the payroll factor plus the sales
factor, and the denominator of which is three.
10. The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in this state during the tax
period and the denominator of which is the average value of all
the taxpayer's real and tangible personal property owned or
rented and used during the tax period.
11. Property owned by the taxpayer is valued at its original
cost. Property rented by the taxpayer is valued at eight times
the net annual rental rate. Net annual rental rate is the annual
rental rate paid by the taxpayer less any annual rental rate
received by the taxpayer from subrentals.
12. The average value of property shall be determined by
averaging the values at the beginning and ending of the tax
period but the tax administrator may require the averaging of
monthly values during the tax period if reasonably required to
reflect properly the average value of the taxpayer's property.
13. The payroll factor is a fraction, the numerator of which is
the total amount paid in this state during the tax period by the
taxpayer for compensation and the denominator of which is the
total compensation paid everywhere during the tax period.
14. Compensation is paid in this state if:
(a) the individual's service is performed entirely within the
state;
(b) the individual's service is performed both within and
without the state, but the service performed without the state is
incidental to the individual's service within the state; or
(c) some of the service is performed in the state and (1) the
base of operations or, if there is no base of operations, the
place from which the service is directed or controlled is in the
state, or (2) the base of operations or the place from which the
service is directed or controlled is not in any state in which
some part of the service is performed, but the individual's
residence is in this state.
15. The sales factor is a fraction, the numerator of which is the
total sales of the taxpayer in this state during the tax period,
and the denominator of which is the total sales of the taxpayer
everywhere during the tax period.
16. Sales of tangible personal property are in this state if:
(a) the property is delivered or shipped to a purchaser, other
than the United States government, within this state regardless
of the f. o. b. point or other conditions of the sale; or
(b) the property is shipped from an office, store, warehouse,
factory, or other place of storage in this state and (1) the
purchaser is the United States government or (2) the taxpayer is
not taxable in the state of the purchaser.
17. Sales, other than sales of tangible personal property, are in
this state if:
(a) the income-producing activity is performed in this state; or
(b) the income-producing activity is performed both in and
outside this state and a greater proportion of the
income-producing activity is performed in this state than in any
other state, based on costs of performance.
18. If the allocation and apportionment provisions of this
article do not fairly represent the extent of the taxpayer's
business activity in this state, the taxpayer may petition for or
the tax administrator may require, in respect to all or any part
of the taxpayer's business activity, if reasonable:
(a) separate accounting;
(b) the exclusion of any one or more of the factors;
(c) the inclusion of one or more additional factors which will
fairly represent the taxpayer's business activity in this state;
or
(d) the employment of any other method to effectuate an
equitable allocation and apportionment of the taxpayer's income.
ARTICLE V. ELEMENTS OF SALES AND USE TAX LAWS
Tax Credit
1. Each purchaser liable for a use tax on tangible personal
property shall be entitled to full credit for the combined amount
or amounts of legally imposed sales or use taxes paid by him with
respect to the same property to another state and any subdivision
thereof. The credit shall be applied first against the amount of
any use tax due the state, and any unused portion of the credit
shall then be applied against the amount of any use tax due a
subdivision.
Exemption Certificates, Vendors May Rely
2. Whenever a vendor receives and accepts in good faith from a
purchaser a resale or other exemption certificate or other
written evidence of exemption authorized by the appropriate state
or subdivision taxing authority, the vendor shall be relieved of
liability for a sales or use tax with respect to the transaction.
ARTICLE VI. THE COMMISSION
Organization and Management
1. (a) The Multistate Tax Commission is hereby established. It
shall be composed of one "member" from each party state who shall
be the head of the state agency charged with the administration
of the types of taxes to which this compact applies. If there is
more than one such agency the state shall provide by law for the
selection of the commission member from the heads of the relevant
agencies. State law may provide that a member of the commission
be represented by an alternate but only if there is on file with
the commission written notification of the designation and
identity of the alternate. The attorney general of each party
state or his designee, or other counsel if the laws of the party
state specifically provide, shall be entitled to attend the
meetings of the commission, but shall not vote. Such attorneys
general, designees, or other counsel shall receive all notices of
meetings required under paragraph 1(e) of this article.
(b) Each party state shall provide by law for the selection of
representatives from its subdivisions affected by this compact to
consult with the commission member from that state.
(c) Each member shall be entitled to one vote. The commission
shall not act unless a majority of the members are present, and
no action shall be binding unless approved by a majority of the
total number of members.
(d) The commission shall adopt an official seal to be used as it
may provide.
(e) The commission shall hold an annual meeting and such other
regular meetings as its bylaws may provide and such special
meetings as its executive committee may determine. The commission
bylaws shall specify the dates of the annual and any other
regular meetings, and shall provide for the giving of notice of
annual, regular and special meetings. Notices of special meetings
shall include the reasons therefor and an agenda of the items to
be considered.
(f) The commission shall elect annually, from among its members,
a chairman, a vice-chairman and a treasurer. The commission shall
appoint an executive director who shall serve at its pleasure,
and it shall fix his duties and compensation. The executive
director shall be secretary of the commission. The commission
shall make provision for the bonding of such of its officers and
employees as it may deem appropriate.
(g) Irrespective of the civil service, personnel or other merit
system laws of any party state, the executive director shall
appoint or discharge such personnel as may be necessary for the
performance of the functions of the commission and shall fix
their duties and compensation. The commission bylaws shall
provide for personnel policies and programs.
(h) The commission may borrow, accept or contract for the
services of personnel from any state, the United States, or any
other governmental entity.
(i) The commission may accept for any of its purposes and
functions any and all donations and grants of money, equipment,
supplies, materials and services, conditional or otherwise, from
any governmental entity, and may utilize and dispose of the same.
(j) The commission may establish one or more offices for the
transacting of its business.
(k) The commission shall adopt bylaws for the conduct of its
business. The commission shall publish its bylaws in convenient
form, and shall file a copy of the bylaws and any amendments
thereto with the appropriate agency or officer in each of the
party states.
(l) The commission annually shall make to the governor and
legislature of each party state a report covering its activities
for the preceding year. Any donation or grant accepted by the
commission or services borrowed shall be reported in the annual
report of the commission, and shall include the nature, amount
and conditions, if any, of the donation, gift, grant or services
borrowed and the identity of the donor or lender. The commission
may make additional reports as it may deem desirable.
Committees
2. (a) To assist in the conduct of its business when the full
commission is not meeting, the commission shall have an executive
committee of seven members, including the chairman,
vice-chairman, treasurer and four other members elected annually
by the commission. The executive committee, subject to the
provisions of this compact and consistent with the policies of
the commission, shall function as provided in the bylaws of the
commission.
(b) The commission may establish advisory and technical
committees, membership on which may include private persons and
public officials, in furthering any of its activities. Such
committees may consider any matter of concern to the commission,
including problems of special interest to any party state and
problems dealing with particular types of taxes.
(c) The commission may establish such additional committees as
its bylaws may provide.
Powers
3. In addition to powers conferred elsewhere in this compact, the
commission shall have power to:
(a) Study state and local tax systems and particular types of
state and local taxes.
(b) Develop and recommend proposals for an increase in
uniformity or compatibility of state and local tax laws with a
view toward encouraging the simplification and improvement of
state and local tax law and administration.
(c) Compile and publish information as in its judgment would
assist the party states in implementation of the compact and
taxpayers in complying with state and local tax laws.
(d) Do all things necessary and incidental to the administration
of its functions pursuant to this compact.
Finance
4. (a) The commission shall submit to the governor or designated
officer or officers of each party state a budget of its estimated
expenditures for such period as may be required by the laws of
that state for presentation to the legislature thereof.
(b) Each of the commission's budgets of estimated expenditures
shall contain specific recommendations of the amounts to be
appropriated by each of the party states. The total amount of
appropriations requested under any such budget shall be
apportioned among the party states as follows: one-tenth in equal
shares; and the remainder in proportion to the amount of revenue
collected by each party state and its subdivisions from income
taxes, capital stock taxes, gross receipts taxes, sales and use
taxes. In determining such amounts, the commission shall employ
such available public sources of information as, in its judgment,
present the most equitable and accurate comparisons among the
party states. Each of the commission's budgets of estimated
expenditures and requests for appropriations shall indicate the
sources used in obtaining information employed in applying the
formula contained in this paragraph.
(c) The commission shall not pledge the credit of any party
state. The commission may meet any of its obligations in whole or
in part with funds available to it under paragraph 1(i) of this
article: provided that the commission takes specific action
setting aside such funds prior to incurring any obligation to be
met in whole or in part in such manner. Except where the
commission makes use of funds available to it under paragraph
1(i), the commission shall not incur any obligation prior to the
allotment of funds by the party states adequate to meet the same.
(d) The commission shall keep accurate accounts of all receipts
and disbursements. The receipts and disbursements of the
commission shall be subject to the audit and accounting
procedures established under its bylaws. All receipts and
disbursements of funds handled by the commission shall be audited
yearly by a certified or licensed public accountant and the
report of the audit shall be included in and become part of the
annual report of the commission.
(e) The accounts of the commission shall be open at any
reasonable time for inspection by duly constituted officers of
the party states and by any persons authorized by the commission.
(f) Nothing contained in this article shall be construed to
prevent commission compliance with laws relating to audit or
inspection of accounts by or on behalf of any government
contributing to the support of the commission.
ARTICLE VII. UNIFORM REGULATIONS AND FORMS
1. Whenever any two or more party states, or subdivisions of
party states, have uniform or similar provisions of law relating
to an income tax, capital stock tax, gross receipts tax, sales or
use tax, the commission may adopt uniform regulations for any
phase of the administration of such law, including assertion of
jurisdiction to tax, or prescribing uniform tax forms. The
commission may also act with respect to the provisions of Article
IV of this compact.
2. Prior to the adoption of any regulation, the commission shall:
(a) As provided in its bylaws, hold at least one public hearing
on due notice to all affected party states and subdivisions
thereof and to all taxpayers and other persons who have made
timely request of the commission for advance notice of its
regulation-making proceedings.
(b) Afford all affected party states and subdivisions and
interested persons an opportunity to submit relevant written data
and views, which shall be considered fully by the commission.
3. The commission shall submit any regulations adopted by it to
the appropriate officials of all party states and subdivisions to
which they might apply. Each such state and subdivision shall
consider any such regulation for adoption in accordance with its
own laws and procedures.
ARTICLE VIII. INTERSTATE AUDITS
1. This article shall be in force only in those party states that
specifically provide therefor by statute.
2. Any party state or subdivision thereof desiring to make or
participate in an audit of any accounts, books, papers, records
or other documents may request the commission to perform the
audit on its behalf. In responding to the request, the commission
shall have access to and may examine, at any reasonable time,
such accounts, books, papers, records, and other documents and
any relevant property or stock of merchandise. The commission may
enter into agreements with party states or their subdivisions for
assistance in performance of the audit. The commission shall make
charges, to be paid by the state or local government or
governments for which it performs the service, for any audits
performed by it in order to reimburse itself for the actual costs
incurred in making the audit.
3. The commission may require the attendance of any person within
the state where it is conducting an audit or part thereof at a
time and place fixed by it within such state for the purpose of
giving testimony with respect to any account, book, paper,
document, other record, property or stock of merchandise being
examined in connection with the audit. If the person is not
within the jurisdiction, he may be required to attend for such
purpose at any time and place fixed by the commission within the
state of which he is a resident: provided that such state has
adopted this article.
4. The commission may apply to any court having power to issue
compulsory process for orders in aid of its powers and
responsibilities pursuant to this article and any and all such
courts shall have jurisdiction to issue such orders. Failure of
any person to obey any such order shall be punishable as contempt
of the issuing court. If the party or subject matter on account
of which the commission seeks an order is within the jurisdiction
of the court to which application is made, such application may
be to a court in the state or subdivision on behalf of which the
audit is being made or a court in the state in which the object
of the order being sought is situated. The provisions of this
paragraph apply only to courts in a state that has adopted this
article.
5. The commission may decline to perform any audit requested if
it finds that its available personnel or other resources are
insufficient for the purpose or that, in the terms requested, the
audit is impracticable of satisfactory performance. If the
commission, on the basis of its experience, has reason to believe
that an audit of a particular taxpayer, either at a particular
time or on a particular schedule, would be of interest to a
number of party states or their subdivisions, it may offer to
make the audit or audits, the offer to be contingent on
sufficient participation therein as determined by the commission.
6. Information obtained by any audit pursuant to this article
shall be confidential and available only for tax purposes to
party states, their subdivisions or the United States.
Availability of information shall be in accordance with the laws
of the states or subdivisions on whose account the commission
performs the audit, and only through the appropriate agencies or
officers of such states or subdivisions. Nothing in this article
shall be construed to require any taxpayer to keep records for
any period not otherwise required by law.
7. Other arrangements made or authorized pursuant to law for
cooperative audit by or on behalf of the party states or any of
their subdivisions are not superseded or invalidated by this
article.
8. In no event shall the commission make any charge against a
taxpayer for an audit.
9. As used in this article, "tax," in addition to the meaning
ascribed to it in Article II, means any tax or license fee
imposed in whole or in part for revenue purposes.
ARTICLE IX. ARBITRATION
1. Whenever the commission finds a need for settling disputes
concerning apportionments and allocations by arbitration, it may
adopt a regulation placing this article in effect,
notwithstanding the provisions of Article VII.
2. The commission shall select and maintain an arbitration panel
composed of officers and employees of state and local governments
and private persons who shall be knowledgeable and experienced in
matters of tax law and administration.
3. Whenever a taxpayer who has elected to employ Article IV, or
whenever the laws of the party state or subdivision thereof are
substantially identical with the relevant provisions of Article
IV, the taxpayer, by written notice to the commission and to each
party state or subdivision thereof that would be affected, may
secure arbitration of an apportionment or allocation, if he is
dissatisfied with the final administrative determination of the
tax agency of the state or subdivision with respect thereto on
the ground that it would subject him to double or multiple
taxation by two or more party states or subdivisions thereof.
Each party state and subdivision thereof hereby consents to the
arbitration as provided herein, and agrees to be bound thereby.
4. The arbitration board shall be composed of one person selected
by the taxpayer, one by the agency or agencies involved, and one
member of the commission's arbitration panel. If the agencies
involved are unable to agree on the person to be selected by
them, such person shall be selected by lot from the total
membership of the arbitration panel. The two persons selected for
the board in the manner provided by the foregoing provisions of
this paragraph shall jointly select the third member of the
board. If they are unable to agree on the selection, the third
member shall be selected by lot from among the total membership
of the arbitration panel. No member of a board selected by lot
shall be qualified to serve if he is an officer or employee or is
otherwise affiliated with any party to the arbitration
proceeding. Residence within the jurisdiction of a party to the
arbitration proceeding shall not constitute affiliation within
the meaning of this paragraph.
5. The board may sit in any state or subdivision party to the
proceeding, in the state of the taxpayer's incorporation,
residence or domicile, in any state where the taxpayer does
business, or in any place that it finds most appropriate for
gaining access to evidence relevant to the matter before it.
6. The board shall give due notice of the times and places of its
hearings. The parties shall be entitled to be heard, to present
evidence, and to examine and cross-examine witnesses. The board
shall act by majority vote.
7. The board shall have power to administer oaths, take
testimony, subpoena and require the attendance of witnesses and
the production of accounts, books, papers, records, and other
documents, and issue commissions to take testimony. Subpoenas may
be signed by any member of the board. In case of failure to obey
a subpoena, and upon application by the board, any judge of a
court of competent jurisdiction of the state in which the board
is sitting or in which the person to whom the subpoena is
directed may be found may make an order requiring compliance with
the subpoena, and the court may punish failure to obey the order
as a contempt. The provisions of this paragraph apply only in
states that have adopted this article.
8. Unless the parties otherwise agree the expenses and other
costs of the arbitration shall be assessed and allocated among
the parties by the board in such manner as it may determine. The
commission shall fix a schedule of compensation for members of
arbitration boards and of other allowable expenses and costs. No
officer or employee of a state or local government who serves as
a member of a board shall be entitled to compensation therefor
unless he is required on account of his service to forego the
regular compensation attaching to his public employment, but any
such board member shall be entitled to expenses.
9. The board shall determine the disputed apportionment or
allocation and any matters necessary thereto. The determinations
of the board shall be final for purposes of making the
apportionment or allocation, but for no other purpose.
10. The board shall file with the commission and with each tax
agency represented in the proceeding: the determination of the
board; the board's written statement of its reasons therefor; the
record of the board's proceedings; and any other documents
required by the arbitration rules of the commission to be filed.
11. The commission shall publish the determinations of boards
together with the statements of the reasons therefor.
12. The commission shall adopt and publish rules of procedure and
practice and shall file a copy of such rules and of any amendment
thereto with the appropriate agency or officer in each of the
party states.
13. Nothing contained herein shall prevent at any time a written
compromise of any matter or matters in dispute, if otherwise
lawful, by the parties to the arbitration proceeding.
ARTICLE X. ENTRY INTO FORCE AND WITHDRAWAL
1. This compact shall enter into force when enacted into law by
any seven states. Thereafter, this compact shall become effective
as to any other state upon its enactment thereof. The commission
shall arrange for notification of all party states whenever there
is a new enactment of the compact.
2. Any party state may withdraw from this compact by enacting a
statute repealing the same. No withdrawal shall affect any
liability already incurred by or chargeable to a party state
prior to the time of such withdrawal.
3. No proceeding commenced before an arbitration board prior to
the withdrawal of a state and to which the withdrawing state or
any subdivision thereof is a party shall be discontinued or
terminated by the withdrawal, nor shall the board thereby lose
jurisdiction over any of the parties to the proceeding necessary
to make a binding determination therein.
ARTICLE XI. EFFECT ON OTHER LAWS AND JURISDICTION
Nothing in this compact shall be construed to:
(a) Affect the power of any state or subdivision thereof to fix
rates of taxation, except that a party state shall be obligated
to implement Article III 2 of this compact.
(b) Apply to any tax or fixed fee imposed for the registration
of a motor vehicle or any tax on motor fuel, other than a sales
tax; provided that the definition of "tax" in Article VIII 9 may
apply for the purposes of that article and the commission's
powers of study and recommendation pursuant to Article VI 3 may
apply.
(c) Withdraw or limit the jurisdiction of any state or local
court or administrative officer or body with respect to any
person, corporation or other entity or subject matter, except to
the extent that such jurisdiction is expressly conferred by or
pursuant to this compact upon another agency or body.
(d) Supersede or limit the jurisdiction of any court of the
United States.
ARTICLE XII. CONSTRUCTION AND SEVERABILITY
This compact shall be liberally construed so as to effectuate the
purposes thereof. The provisions of this compact shall be
severable and if any phrase, clause, sentence or provision of
this compact is declared to be contrary to the constitution of
any state or of the United States or the applicability thereof to
any government, agency, person or circumstance is held invalid,
the validity of the remainder of this compact and the
applicability thereof to any government, agency, person or
circumstance shall not be affected thereby. If this compact shall
be held contrary to the constitution of any state participating
therein, the compact shall remain in full force and effect as to
the remaining party states and in full force and effect as to the
state affected as to all severable matters.
Acts 1981, 67th Leg., p. 1528, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 141.002. COMMISSION MEMBER FOR THIS STATE. The governor
shall appoint the comptroller to represent this state on the
Multistate Tax Commission created by Article VI of the compact.
The comptroller may designate a principal deputy or assistant as
an alternate representative on the commission.
Acts 1981, 67th Leg., p. 1540, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 479, Sec. 208, eff.
Sept. 1, 1985; Acts 1989, 71st Leg., ch. 24, Sec. 1, eff. Sept.
1, 1989.
Sec. 141.003. NOTICE OF MEETINGS. The comptroller shall file
with the secretary of state for publication in the Texas Register
a notice of the general meetings of the Multistate Tax
Commission.
Acts 1981, 67th Leg., p. 1540, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 24, Sec. 1, eff. Sept.
1, 1989.
Sec. 141.005. INTERSTATE AUDIT ARTICLE ADOPTED. The provisions
of Article VIII of the compact, relating to interstate audits,
are in force with respect to this state.
Acts 1981, 67th Leg., p. 1540, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 141.006. REPORT. Before October 1 of each year, the
comptroller shall prepare and file with the presiding officer of
each house of the legislature a complete and detailed report
describing the activities of and accounting for all funds
received and disbursed by the comptroller's office relating to
the compact in the preceding fiscal year. The report must be
included as a part of the annual financial report of the
comptroller's office.
Added by Acts 1989, 71st Leg., ch. 24, Sec. 1, eff. Sept. 1,
1989.