States Consider Airline Revenue Models for Tax Apportionment

A multistate initiative examining the tax treatment of new forms of airline industry revenue, including credit-card points and in-flight Wi-Fi, narrowed in on a proposed rule that will help states avoid conflicts over the proper jurisdiction for taxation.

The Multistate Tax Commission’s Model Receipts Sourcing Regulation Review Work Group on Tuesday circulated a new draft of its airlines special industry rule, which hasn’t been updated since 1983. The group plans to finalize and approve the draft at its next meeting, said work group chair Katie Frank, who also serves as tax counsel for the California Franchise Tax Board.

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