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“Panel Highlights Concerns with MTC Guidance on P.L. 86-272” – Tax Notes

March 15, 2023

Jennifer Karpchuk’s recent panel presentation quoted in the article, “Panel Highlights Concerns With MTC Guidance on P.L. 86-272”

In a March 16 Tax Notes article highlighting the 2023 American Bar Association/Institute for Professionals in Taxation Advanced State Income Tax Seminar in New Orleans, Philadelphia-based State and Local Tax (S.A.L.T.) Practice Co-Chair Jennifer Karpchuk provides insight from a panel discussion on the Multistate Tax Commission’s revised guidelines on P.L. 86-272.

The panelists noted that these guidelines have businesses questioning the taxability of activities conducted over the internet and whether or how states will adopt the guidelines.

The article mentions that “panelists discussed that while businesses' use of the internet continues to evolve and becomes more complex, it has led to confusion over what taxes are due and where – and is further complicated when states attempt to adopt the MTC’s position on P.L. 86-272 on audit rather than through rulemaking procedures.”

“With each of these revisions, I think all of us up here would say they have tried to further limit the applicability and the scope of the federal law’s protections,” explained Karpchuk.

According to Karpchuk, the Supreme Court’s 2018 decision in South Dakota v. Wayfair Inc. prompted the MTC to attempt to harmonize the language in Wayfair regarding nexus and internet activities with P.L. 86-272 “and how the world has changed since 1959.” The panel further explained that the updated guidance provides a list of activities that the MTC believes are no longer protected under the statute and specifically addresses internet activities.

To learn more, subscribers may view the full article here.