All States ~ Multiple Taxes: MTC Executive Committee Forwards Lodging Tax, Communications Tax Proposals to Public Hearings

The Executive Committee of the Multistate Tax Commission (MTC) voted to forward two proposals to public hearings during a March 1 conference call. One proposal deals with the remittance of lodging taxes and the other concerns the administration of communications taxes.

The model statute on options for the collection and remittance of lodging taxes by accommodations intermediaries addresses the narrow issue of the administrative process by which state and local lodging taxes that are collected by accommodations intermediaries will be remitted. It does not take a position on what tax base is proper, but provides a remittance model for those jurisdictions that impose tax on the full retail price of a room charged by an intermediary to its customer. The current draft model was prepared by the MTC staff with input from the hotel industry and accommodations intermediaries after a previous draft received insufficient support from the MTC member states to move forward. It offers the states two remittance options from which to choose. After approving a technical amendment to the draft, the Executive Committee voted to hold a public hearing on the latest version. The committee expects the model will be ready for final consideration by the entire MTC at its annual meeting in Grand Rapids, Michigan, this summer.

A separate proposal offers “best practices” for the centralized collection and administration of communications transaction taxes. The proposal offers three models from which a state may choose based on its basic centralized administration level. This project was inspired by federal legislation introduced in previous Congresses that would have required communications tax simplification as a condition for sales and use tax collection authority over remote sales. The MTC is proceeding with the project at the urging of the telecommunications industry, although the remote-collection legislation pending in the current Congress does not require communications tax simplification. The Executive Committee voted to send this new proposal forward to its first public hearing.

Copies of the proposals considered by the committee can be found at http://www.mtc.gov/Executive.aspx?id=5450.

Conference call, Multistate Tax Commission Executive Committee, March 1, 2012

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