AICPA Testifies Against MTC Draft Model Sales and Use Tax Notice and Reporting Statute

June 14, 2018

  • Draft Model Statute has many costs and few benefits
  • Other more effective alternatives exist
  • Cathie Stanton, CPA, chair of the AICPA State and Local Tax Technical Resource Panel testifies

Washington, D.C. (June 14, 2018) – The American Institute of CPAs (AICPA) opposed adoption of the Multistate Tax Commission (MTC) Model Sales and Use Tax Notice and Reporting Statute at a MTC hearing today.

“The AICPA urges the MTC and its member states not to adopt the Draft Model Statute because it is contrary to good tax policy, has many costs and few benefits, and will lead to further complications and burdens on customers, sellers, marketplace facilitators and referrers, as well as the state,” Cathie Stanton, CPA, chair of the AICPA State and Local Tax Technical Resource Panel testified at the hearing.  “Other more effective alternatives exist that properly place the sales and use tax burden on the appropriate party – the in-state buyer,” she said.

Stanton elaborated on the AICPA’s reasons for opposing the Draft Model Statute.  She said the:

  • Draft Model Statute should not require out-of-state businesses that do not have any obligation to collect and remit sales tax to police use tax noncompliance at the businesses’ own expense.  There other are low-cost, comprehensive, and more appropriate techniques for states to address the problem of low sales and use tax compliance rates.
  • Draft Model Statute would likely compel sales and use tax collection by businesses that are not required under Quill to collect sales and use tax.  Forcing this result through the imposition of a burdensome reporting regime is contrary to good tax policy.
  • Costs of compliance with the Draft Model Statute outweigh the benefits received by the states receiving the reported information.  Businesses will incur new or increased costs of compliance under the Draft Model Statute.
  • Draft Model Statute exceeds the conventional principles of sales and use tax, which will lead to further complications and burdens on all parties involved.