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Judicial Rulings

U.S. Supreme Court

Approve multistate compact

The U.S. Supreme Court ruled in February that the Multistate Tax Commission was not in violation of any federal laws. The high court upheld a New York U.S. District Court decision of October 1977.

The case, United States Steel Corp. et al. v. Multistate Tax Commission, dealt with the legality of a number of states making a pact agreement which would: (1) facilitate proper determination of state and local tax liability of multistate taxpayers; (2) promote uniformity and compatibility in state tax systems; (3) facilitate taxpayer convenience and compliance in the filing of tax returns and in other phases of tax administration, (4) and avoid duplicating taxation.

The U.S. Steel Corp. argued that the Multistate Tax Compact abridges the rights of multistate taxpayers under the 14th Amendment, unreasonably burdens interstate commerce and is invalid under the Compact Clause of the U.S. Constitution which states, "No state shall without consent of Congress. . . enter into any agreement or compact with another state."

Associate Justice Byron Raymond White delivered the Court's opinion, which said the states involved have tried three times to get the U.S. Congress to look at and approve the Multistate Tax Compact, but Congress has never done so.

Currently there are 18 states belonging to the Multistate Tax Compact. Illinois was one of the original charter members in 1969, but seceded in 1975 by a vote of the lllinois legislature.

During the time Illinois belonged to the compact, it didn't receive a great enough return for the cost it was incurring, according to Robert Whitler, director of the lllinois Revenue Department. He said there was and is no uniformity of corporate tax laws for the 50 states.

Whitler said he doesn't know of any current legislation that proposes Illinois rejoin the compact, but the Revenue Department is keeping abreast of new developments just in case.

30/May 1978/Illinois Issues


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