Document Type



Taxation-State and Local


The Uniform Law Commission (ULC) promulgated its model Uniform Division of Income for Tax Purposes Act (UDITPA) in 1957. UDITPA provides a model law for dividing the income of a multistate corporation among the states in which it is doing business. UDITPA is incorporated into the Multistate Tax Compact, which is administered by the Multistate Tax Commission.

UDITPA has never been amended since its original adoption more than fifty years ago. The ULC attempted a revision in 2006 but abandoned it in response to business pressures. The MTC stepped into the vacuum and undertook its own reforms. It proposed five major changes covering the definition of business and nonbusiness income and the sales factor, changes to factor weighting, and the sourcing of intangibles and services, and changes in the rules on equitable apportionment.

The Hearing Officer (who is the author of this hearing report) held a public hearing and received extensive comments to the suggested changes, especially about market-based sourcing. This exhaustive and lengthy report provides a background to the amendments, a summary of the proposals’ substantive features, a review of the public testimony, and the Hearing Officer’s comments, criticisms, and recommendations, including in many cases, his proposals for redrafting UDITPA in ways that improve upon the MTC’s draft.