Bradley Partner Bruce Ely Quoted in Bloomberg BNA on Planning for Partnership Audit Changes

State and Local Tax (SALT) attorney Bruce Ely was quoted in Bloomberg BNA on the response of states and business groups to the new federal partnership audit regime. Soon after the Bipartisan Budget Act of 2015 was signed into law, the Multistate Tax Commission (MTC) drafted language meant to address questions and analyze ramifications of the new audit approach. But some interested parties are concerned that the MTC’s recommendations may be interpreted as final policy decisions.

Ely, co-chair of the ABA task force, hopes MTC staff will defer further recommendations or policy decisions until there has been opportunity to review the interested parties’ legislative framework. Ely said the risk of “dueling model acts” will jeopardize the prospects of uniform legislation among states, if the MTC declines to endorse the groups’ proposed legislation.

He said the ideal goal is for the business groups and the MTC to unite behind one uniform bill by this fall—he noted that the MTC can incorporate options into the interested parties’ model legislation to accommodate state differences. If there is shared support for the model bill, a grassroots system will spring into action, with lawyers and accounting firms in each state assisting the business organizations in identifying state-specific issues and lobbying state lawmakers to enact legislation.

“It's a rare moment to have all the business and professional groups together on the same page,” Ely said, explaining that a coordinated effort with the MTC would improve the prospects of states adopting a uniform approach.

“We won't see perfectly uniform legislation in every state, hopefully 90 percent correlation,” Ely said. However, absent broad agreement on one model bill, “I fear that we'll be fighting for opposing bills in the legislatures of many states, and in D.C. and New York City next year.”

The complete article, “States, Tax Groups Furiously Planning for Partnership,” appeared in Bloomberg BNA on April 20, 2017. (login required)