CHAPTER 141. MULTISTATE TAX COMPACT - Texas Statutes

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.