N.D. Cent. Code § 57-59-01 Multistate tax compact
57-59-01. Multistate tax compact
The multistate tax compact is hereby entered into law and entered into with all jurisdictions
legally joining therein, in the form substantially as follows:
MULTISTATE TAX COMPACT
ARTICLE I - PURPOSES
The purposes of this compact are to:
1. Facilitate proper determination of state and local tax liability of multistate taxpayers,
including the equitable apportionment of tax bases and settlement of apportionment
disputes.
2. Promote uniformity or compatibility in significant components of tax systems.
3. Facilitate taxpayer convenience and compliance in the filing of tax returns and in other
phases of tax administration.
4. Avoid duplicative taxation.
ARTICLE II - DEFINITIONS
As used in this compact:
1. "Capital stock tax" means a tax measured in any way by the capital of a corporation
considered in its entirety.
2. "Gross receipts tax" means a tax, other than a sales tax, which is imposed on or
measured by the gross volume of business, in terms of gross receipts or in other
terms, and in the determination of which no deduction is allowed which would
constitute the tax an income tax.
3. "Income tax" means a tax imposed on or measured by net income including any tax
imposed on or measured by an amount arrived at by deducting expenses from gross
income, one or more forms of which expenses are not specifically and directly related
to particular transactions.
4. "Sales tax" means a tax imposed with respect to the transfer for a consideration of
ownership, possession, or custody of tangible personal property or the rendering of
services measured by the price of the tangible personal property transferred or
services rendered and which is required by state or local law to be separately stated
from the sales price by the seller, or which is customarily separately stated from the
sales price, but does not include a tax imposed exclusively on the sale of a specifically
identified commodity or article or class of commodities or articles.
5. "State" means a state of the United States, the District of Columbia, the
commonwealth of Puerto Rico, or any territory or possession of the United States.
6. "Subdivision" means any governmental unit or special district of a state.
7. "Tax" means an income tax, capital stock tax, gross receipts tax, sales tax, use tax,
and any other tax which has a multistate impact, except that the provisions of article III
of this compact shall apply only to the taxes specifically designated therein.
8. "Taxpayer" means any corporation, partnership, firm, association, governmental unit,
or agency or person acting as a business entity in more than one state.
9. "Use tax" means a nonrecurring tax, other than a sales tax, which (a) is imposed on or
with respect to the exercise or enjoyment of any right or power over tangible personal
property incident to the ownership, possession, or custody of that property or the
leasing of that property from another including any consumption, keeping, retention, or
other use of tangible personal property, and (b) is complementary to a sales tax.
ARTICLE III - ELEMENTS OF SALES AND USE TAX LAWS
Tax Credit
1. Each purchaser liable for a use tax on tangible personal property shall be entitled to
full credit for the combined amount or amounts of legally imposed sales or use taxes
paid by the purchaser with respect to the same property to another state and any
subdivision thereof. The credit shall be applied first against the amount of any use tax
due the state, and any unused portion of the credit shall then be applied against the
amount of any use tax due a subdivision.
Exemption Certificates, Vendors May Rely
2. Whenever a vendor receives and accepts in good faith from a purchaser a resale or
other exemption certificate or other written evidence of exemption authorized by the
appropriate state or subdivision taxing authority, the vendor shall be relieved of liability
for a sales or use tax with respect to the transaction.
ARTICLE IV - THE COMMISSION
Organization and Management
1. (a) The multistate tax commission is hereby established. It shall be composed of one
"member" from each party state who shall be the head of the state agency
charged with the administration of the types of taxes to which this compact
applies. If there is more than one such agency the state shall provide by law for
the selection of the commission member from the heads of the relevant agencies.
State law may provide that a member of the commission be represented by an
alternate but only if there is on file with the commission written notification of the
designation and identity of the alternate. The attorney general of each party state
or the attorney general's designee, or other counsel if the laws of the party state
specifically provide, shall be entitled to attend the meetings of the commission,
but shall not vote. Such attorneys general, designees, or other counsel shall
receive all notices of meetings required under subdivision e of subsection 1 of
this article.
(b) Each party state shall provide by law for the selection of representatives from its
subdivisions affected by this compact to consult with the commission member
from that state.
(c) Each member shall be entitled to one vote. The commission shall not act unless a
majority of the members are present, and no action shall be binding unless
approved by a majority of the total number of members.
(d) The commission shall adopt an official seal to be used as it may provide.
(e) The commission shall hold an annual meeting and such other regular meetings
as its bylaws may provide and such special meetings as its executive committee
may determine. The commission bylaws shall specify the dates of the annual and
any other regular meetings, and shall provide for the giving of notice of annual,
regular, and special meetings. Notices of special meetings shall include the
reasons therefor and an agenda of the items to be considered.
(f) The commission shall elect annually, from among its members, a chairman, a
vice chairman, and a treasurer. The commission shall appoint an executive
director who shall serve at its pleasure, and it shall fix the executive director's
duties and compensation. The executive director shall be secretary of the
commission. The commission shall make provision for the bonding of such of its
officers and employees as it may deem appropriate.
(g) Irrespective of the civil service, personnel, or other merit system laws of any party
state, the executive director shall appoint or discharge such personnel as may be
necessary for the performance of the functions of the commission and shall fix
their duties and compensation. The commission bylaws shall provide for
personnel policies and programs.
(h) The commission may borrow, accept, or contract for the services of personnel
from any state, the United States, or any other governmental entity.
(i) The commission may accept for any of its purposes and functions any and all
donations and grants of money, equipment, supplies, materials, and services,
conditional or otherwise, from any governmental entity, and may utilize and
dispose of the same.
(j) The commission may establish one or more offices for the transacting of its
business.
(k) The commission shall adopt bylaws for the conduct of its business. The
commission shall publish its bylaws in convenient form, and shall file a copy of
the bylaws and any amendments thereto with the appropriate agency or officer in
each of the party states.
(l) The commission annually shall make to the governor and legislature of each
party state a report covering its activities for the preceding year. Any donation or
grant accepted by the commission or services borrowed shall be reported in the
annual report of the commission, and shall include the nature, amount, and
conditions, if any, of the donation, gift, grant, or services borrowed and the
identity of the donor or lender. The commission may make additional reports as it
may deem desirable.
Committees
2. (a) To assist in the conduct of its business when the full commission is not meeting,
the commission shall have an executive committee of seven members, including
the chairman, vice chairman, treasurer, and four other members elected annually
by the commission. The executive committee subject to the provisions of this
compact and consistent with the policies of the commission, shall function as
provided in the bylaws of the commission.
(b) The commission may establish advisory and technical committees, membership
on which may include private persons and public officials, in furthering any of its
activities. Such committees may consider any matter of concern to the
commission, including problems of special interest to any party state and
problems dealing with particular types of taxes.
(c) The commission may establish such additional committees as its bylaws may
provide.
Powers
3. In addition to powers conferred elsewhere in this compact, the commission shall have
power to:
(a) Study state and local tax systems and particular types of state and local taxes.
(b) Develop and recommend proposals for an increase in uniformity or compatibility
of state and local tax laws with a view toward encouraging the simplification and
improvement of state and local tax law and administration.
(c) Compile and publish information as in its judgment would assist the party states
in implementation of the compact and taxpayers in complying with state and local
tax laws.
(d) Do all things necessary and incidental to the administration of its functions
pursuant to this compact.
Finance
4. (a) The commission shall submit to the governor or designated officer or officers of
each party state a budget of its estimated expenditures for such period as may be
required by the laws of that state for presentation to the legislature thereof.
(b) Each of the commission's budgets of estimated expenditures shall contain
specific recommendations of the amounts to be appropriated by each of the party
states. The total amount of appropriations requested under any such budget shall
be apportioned among the party states as follows: one-tenth in equal shares; and
the remainder in proportion to the amount of revenue collected by each party
state and its subdivisions from income taxes, capital stock taxes, gross receipts
taxes, and sales and use taxes. In determining such amounts, the commission
shall employ such available public sources of information as, in its judgment,
present the most equitable and accurate comparisons among the party states.
Each of the commission's budgets of estimated expenditures and requests for
appropriations shall indicate the sources used in obtaining information employed
in applying the formula contained in this subsection.
(c) The commission shall not pledge the credit of any party state. The commission
may meet any of its obligations in whole or in part with funds available to it under
subdivision i of subsection 1 of this article; provided, that the commission takes
specific action setting aside such funds prior to incurring any obligation to be met
in whole or in part in such manner. Except where the commission makes use of
funds available to it under subdivision i of subsection 1, the commission shall not
incur any obligation prior to the allotment of funds by the party states adequate to
meet the same.
(d) The commission shall keep accurate accounts of all receipts and disbursements.
The receipts and disbursements of the commission shall be subject to the audit
and accounting procedures established under its bylaws. All receipts and
disbursements of funds handled by the commission shall be audited yearly by a
certified or licensed public accountant and the report of the audit shall be included
in and become part of the annual report of the commission.
(e) The accounts of the commission shall be open at any reasonable time for
inspection by duly constituted officers of the party states and by any persons
authorized by the commission.
(f) Nothing contained in this article shall be construed to prevent commission
compliance with laws relating to audit or inspection of accounts by or on behalf of
any government contributing to the support of the commission.
ARTICLE V - UNIFORM REGULATIONS AND FORMS
1. Whenever any two or more party states, or subdivisions of party states, have uniform
or similar provisions of law relating to an income tax, the commission may adopt
uniform regulations for any phase of the administration of such law, including assertion
of jurisdiction to tax, or prescribing uniform tax forms.
2. Prior to the adoption of any regulation, the commission shall:
(a) As provided in its bylaws, hold at least one public hearing on due notice to all
affected party states and subdivisions thereof and to all taxpayers and other
persons who have made timely request of the commission for advance notice of
its regulation-making proceedings.
(b) Afford all affected party states and subdivisions and interested persons an
opportunity to submit relevant written data and views, which shall be considered
fully by the commission.
3. The commission shall submit any regulations adopted by it to the appropriate officials
of all party states and subdivisions to which they might apply. Each such state and
subdivision shall consider any such regulation for adoption in accordance with its own
laws and procedures.
ARTICLE VI - INTERSTATE AUDITS
1. This article shall be in force only in those party states that specifically provide therefor
by statute.
2. Any party state or subdivision thereof desiring to make or participate in an audit of any
accounts, books, papers, records, or other documents may request the commission to
perform the audit on its behalf. In responding to the request, the commission shall
have access to and may examine, at any reasonable time, such accounts, books,
papers, records, and other documents and any relevant property or stock of
merchandise. The commission may enter into agreements with party states or their
subdivisions for assistance in performance of the audit. The commission shall make
charges, to be paid by the state or local government or governments for which it
performs the service, for any audits performed by it in order to reimburse itself for the
actual costs incurred in making the audit.
3. The commission may require the attendance of any person within the state where it is
conducting an audit or part thereof at a time and place fixed by it within such state for
the purpose of giving testimony with respect to any account, book, paper, document,
other record, property, or stock of merchandise being examined in connection with the
audit. If the person is not within the jurisdiction, the person may be required to attend
for such purpose at any time and place fixed by the commission within the state of
which the person is a resident; provided, that such state has adopted this article.
4. The commission may apply to any court having power to issue compulsory process for
orders in aid of its powers and responsibilities pursuant to this article and any and all
such courts shall have jurisdiction to issue such orders. Failure of any person to obey
any such order shall be punishable as contempt of the issuing court. If the party or
subject matter on account of which the commission seeks an order is within the
jurisdiction of the court to which application is made, such application may be to a
court in the state or subdivision on behalf of which the audit is being made or a court in
the state in which the object of the order being sought is situated. The provisions of
this subsection apply only to courts in a state that has adopted this article.
5. The commission may decline to perform any audit requested if it finds that its available
personnel or other resources are insufficient for the purpose or that, in the terms
requested, the audit is impracticable of satisfactory performance. If the commission, on
the basis of its experience, has reason to believe that an audit of a particular taxpayer,
either at a particular time or on a particular schedule, would be of interest to a number
of party states or their subdivisions, it may offer to make the audit or audits, the offer to
be contingent on sufficient participation therein as determined by the commission.
6. Information obtained by any audit pursuant to this article shall be confidential and
available only for tax purposes to party states, their subdivisions, or the United States.
Availability of information shall be in accordance with the laws of the states or
subdivisions on whose account the commission performs the audit, and only through
the appropriate agencies or officers of such states or subdivisions. Nothing in this
article shall be construed to require any taxpayer to keep records for any period not
otherwise required by law.
7. Other arrangements made or authorized pursuant to law for cooperative audit by or on
behalf of the party states or any of their subdivisions are not superseded or invalidated
by this article.
8. In no event shall the commission make any charge against a taxpayer for an audit.
9. As used in this article, "tax", in addition to the meaning ascribed to it in article II,
means any tax or license fee imposed in whole or in part for revenue purposes.
ARTICLE VII - ENTRY INTO FORCE AND WITHDRAWAL
1. This compact shall enter into force when enacted into law by any seven states.
Thereafter, this compact shall become effective as to any other state upon its
enactment thereof. The commission shall arrange for notification of all party states
whenever there is a new enactment of the compact.
2. Any party state may withdraw from this compact by enacting a statute repealing the
same. No withdrawal shall affect any liability already incurred by or chargeable to a
party state prior to the time of such withdrawal.
ARTICLE VIII - EFFECT ON OTHER LAWS AND JURISDICTION
Nothing in this compact shall be construed to:
1. Affect the power of any state or subdivision thereof to fix rates of taxation.
2. Apply to any tax or fixed fee imposed for the registration of a motor vehicle or any tax
on motor fuel, other than a sales tax; provided, that the definition of "tax" in
subsection 9 of article VI may apply for the purposes of that article and the
commission's powers of study and recommendation pursuant to subsection 3 of
article IV may apply.
3. Withdraw or limit the jurisdiction of any state or local court or administrative officer or
body with respect to any person, corporation, or other entity or subject matter, except
to the extent that such jurisdiction is expressly conferred by or pursuant to this
compact upon another agency or body.
4. Supersede or limit the jurisdiction of any court of the United States.
ARTICLE IX - CONSTRUCTION AND SEVERABILITY
This compact shall be liberally construed so as to effectuate the purposes thereof. The
provisions of this compact shall be severable and if any phrase, clause, sentence, or provision
of this compact is declared to be contrary to the constitution of any state or of the United States
or the applicability thereof to any government, agency, person, or circumstance is held invalid,
the validity of the remainder of this compact and the applicability thereof to any government,
agency, person, or circumstance shall not be affected thereby. If this compact shall be held
contrary to the constitution of any state participating therein, the compact shall remain in full
force and effect as to the remaining party states and in full force and effect as to the state
affected as to all severable matters.