The Multistate Tax Commission (“MTC”) is set to revamp its transfer pricing collaboration and enforcement initiatives following the first public meeting of its State Intercompany Transactions Advisory Service (“SITAS”) Committee in over four years. At the end of last year, the SITAS Committee appointed its new Chair- Krystal Bolton, who is also an assistant director at the Louisiana Department of Revenue’s field audit income tax division. On March 23rd, Ms. Bolton hosted representatives from state revenue agencies, practitioners, taxpayers, and other members of the public in a virtual conference to overview the history of the SITAS Committee and to present the results of a multistate survey regarding intercompany transactions and transfer pricing.
Two states recently unveiled transfer pricing enforcement tactics to, in their view, combat improper intercompany profit shifting.
The Massachusetts Supreme Judicial Court recently held in The First Marblehead Corporation v. Commissioner of Revenue (“First Marblehead II”), 475 Mass. 159 (2016), that securitized loans of GATE Holdings Inc. (“Gate”) were properly sourced to Gate’s commercial domicile in Massachusetts for purposes of computing Gate’s property factor for Massachusetts financial institutions excise tax (“FIET”) purposes, and that the FIET, as applied to Gate, satisfies the internal consistency test.