As states continue to ensure that companies are properly registered and reporting tax liabilities, the sharing of information between state tax authorities continues to be used to identify non-filers as well as finding improper filing positions.

Alabama, Louisiana, Mississippi, New Jersey and Washington have formally entered into an exchange of information agreement adopted by the Multistate Tax Commission’s State Intercompany Transactions Advisory Service Committee (SITAS) last July. These states will now participate in a series of closed-door training and information sharing meetings. The number of states entering this agreement to share information should be closely monitored. This sharing strategy has been deemed controversial by some corporate taxpayers as it does not protect taxpayers’ confidential information. Taxpayers should be aware that states will be sharing not just who is filing in the various states but how they are reporting their tax liabilities amongst the states as well as how they are pricing intercompany transactions.       

If you have any questions contact Jason Skrinak, CPA.