Tax News

CCH (cch.taxgroup.com) reports:

  While expressing doubt about the feasibility of revising the Uniform Division of Income for Tax Purposes Act (UDITPA), the chair of the committee appointed to study that revision has asked that the committee be given until January 2010 to continue to explore the issue. Dale Higer, chair of the Uniform Law Commission (ULC) Study Committee to Revise UDITPA, included his request in a May 26 report to the chair of the ULC Scope and Program Committee. Higer, a commissioner from Idaho, summarized the study committee's March meeting in Chicago, during which taxpayer representatives and their legislative supporters continued to express their opposition to the ULC's revision effort. (TAXDAY, 2009/03/31, S.1)

  During a conference call on May 14, study committee members generally agreed that UDITPA needs to be updated. However, several members, including Higer, believe that "any effort to revise UDITPA will result in total resistance by affected taxpayers." A consultant to the committee disagreed, believing that, if the committee announced plans to move forward, affected taxpayers would participate in the drafting process. As a result of the conference call, Higer has asked to have until January 2010 to "explore with elected executive and legislative leaders of the states the need to revise UDITPA."

  The study committee is soliciting comments from the public on its "tentative" recommendation to have until January 2010 to continue its work. Written comments should be submitted no later than June 22 to john.sebert@nccusl.org or lucy.grelle@nccusl.org.

  Higer attached to his report a memorandum from the study committee's reporters: Prof. Richard Pomp, University of Connecticut Law School, and Prentiss Willson, a consultant formerly with Morrison & Foerster and Ernst & Young. Saying that the ULC is "at a crossroads," Pomp and Willson stated: "No one disagrees that [UDITPA] is deeply flawed. The [ULC] faces two polar choices: fix it, or repeal it." They rejected the proposal, raised during the Chicago meeting, of changing the uniform act into a model act. The ULC encourages states to select from the sections of a model act those that fit them and there is no obligation to work for uniform adoption in all states. This is unlike the rules governing a uniform act. If the committee proceeds with the revision, Pomp and Willson suggested a set of priorities to guide the work.

  Subscribers can view the study committee report and the memorandum from Pomp and Willson.

  Email, Uniform Law Commission, May 28, 2009