Perspectives

Multistate Tax Commission reviews draft design for transfer pricing project

Multistate tax alert | October 13, 2014

​The Multistate Tax Commission’s (“MTC”) Arm’s-length Adjustment Service Advisory Group (“Advisory Group”) held a two-day conference in Atlanta, Georgia on October 6 and 7 (the “Conference”) to meet with transfer pricing firms and discuss the MTC’s project to develop a multistate transfer pricing service.

Multistate Tax Commission's transfer pricing project

The Multistate Tax Commission’s (“MTC”) Arm’s-length Adjustment Service Advisory Group (“Advisory Group”) held a two-day conference in Atlanta, Georgia on October 6 and 7 (the “Conference”) to meet with transfer pricing firms and discuss the MTC’s project to develop a multistate transfer pricing service. On the first day, seven economic firms specializing in transfer pricing presented to and fielded questions from the Advisory Group. While project facilitator Dan Bucks1 made clear that these presentations were not part of a procurement process, the state participants’ discussions and the project facilitator’s preliminary draft design show that some combination of contracted assistance from transfer pricing firms and/or direct employment of economists on the MTC staff is currently being considered. On the second day, the Advisory Group discussed their observations based upon the presentations and a preliminary draft design for an arm’s-length adjustment service, which Bucks had prepared in advance of the conference.

The Advisory Group is currently working toward a goal of approving a draft service design by mid-November 2014 for initial review by the MTC Executive Committee in December 2014. The Advisory Group’s next scheduled meeting is a teleconference on November 3. In this Alert, we provide background on the MTC transfer pricing project, summarize issues and ideas discussed during the Conference, and suggest additional considerations.

1 Dan Bucks was formerly the MTC Executive Director and Montana Director of Revenue.

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The Multistate Tax Alert Archive includes external tax alerts issued by Deloitte Tax LLP's Multistate Tax practice during the last three years. These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters. The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons.

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