DIVISION OF REVENUE                         October 22, 1996
     
     
     TECHNICAL INFORMATION MEMORANDUM 96-9 (Revised)
     
     SUBJECT:
     COOPERATIVE AGREEMENT ON MULTIPLE TAXATION BY
     NORTHEASTERN STATES
     
     CONTACT:  
     John Maciejeski (302) 577-3321
     
     
     Technical Information Memorandum 96-9 contained a typographical error.  This
     Revised Memorandum replaces TIM 96-9.
      
     Eleven northeastern states and the District of Columbia have ratified a cooperative
     agreement concerning the determination of an individual's domicile and/or
     residency and the multiple taxation of income that often results from conflicting
     determination by the various states.
     
     The historic agreement was signed by officials of the 12-member North Eastern
     States Tax Official Association (NESTOA) at the group's annual meeting in
     Newport, Rhode Island.
     
     The accord addresses the problem of the multiple taxation of individuals who are
     deemed to be domiciliaries of more than one state, and of individuals who are
     determined to be domiciliaries of one state and statutory resident of another state.
     
     NESTOA members, recognizing both the unfairness of the current situation to
     individuals and the tax compliance problems it generates, have joined together to
     formulate a solution which benefits both the individuals and the states.
     
     The NESTOA agreement promotes uniformity among states in terms of tax policy
     relating to these individuals, and was predicated on these basic goals:
     
     That individuals should only be deemed to be domiciliary of one state for any given
     period;
     
     * That criteria used by the states in determining an individual's domicile should be
     as uniform as possible;  and 
     
     * That uniform sourcing rules should be applied by the states to reduce or
     eliminate multiple state taxation of the same income.
     
     * Under the accord, the tax administrators have agreed to incorporate the
     following concepts in their tax policy relating to affected individuals:
     
     * Apply uniform primary criteria for determining a taxpayer's domicile.
     
     * Implement an informal appeals process which would be available to taxpayers
     involved in a domicile dispute with multiple members.  The Delaware contact
     person for the purpose of initiating such an appeal is John Maciejeski at (302)
     577-3321.
     
     * Apply uniform rules in the sourcing of income and the calculation of credits for
     taxes paid to other states.
     
     * Establish a system of interstate sharing of data and compliance techniques in the
     area of domicile and statutory residencies.
     
     * Publish an informational pamphlet outlining the agreement and contact person
     in each state's tax administration agency.
     
     In states in which tax statutes and regulations do not currently permit the adoption
     of such methods, the tax administrators have agreed to make every reasonable
     attempt to encourage the necessary legislative or regulatory changes to permit the
     implementation of the agreement.  In Delaware, 30 Del. C. 1111 already reaches
     the result agreed upon among the NESTOA states.  Specifically, under 1111,
     residents, whether statutory or domiciliaries, are allowed credits for taxes paid
     other states on income derived from sources in such states.  Under Delaware law,
     income from intangible assets typically has its source at the domicile of the owner
     of the asset.  Thus, the Delaware statutory resident would receive a credit for taxes
     paid to the state of domicile on such income.
     
     The NESTOA member states believe that this agreement addresses a longstanding
     problem recognized by both taxpayers and the states, and provides for an equitable
     solution for both.
     
     NESTOA includes the states of Maine, New Hampshire, Vermont, Massachusetts,
     Connecticut, Rhode Island, New York, New Jersey, Pennsylvania, Delaware and
     Maryland and the District of Columbia.
     
     William M. Remington
     Director of Revenue
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     Tim96-9wmr