Seven members of a presidential commission appointed to resolve a controversy over state taxation of multinational corporations yesterday took issue with Treasury Secretary Donald T. Regan over his threat to support federal legislation to settle the issue.
Regan said July 31 that he would seek a federal legislative solution unless the states make "appreciable progress" toward rewriting their tax laws to eliminate problems by next July 31. Regan's statement was contained in his own report to President Reagan based on meetings of the working group of state, federal and corporate officials who studied a method of corporate taxation known as the "unitary" system.
The seven officials who were part of that effort yesterday disassociated themselves from Regan's deadline for states to act. The seven were Gov. George Deukmejian of California and Gov. Scott M. Matheson of Utah; H. Lee Moffitt, speaker of the Florida house; John B. Tucker, speaker of the New Hampshire house; Owen T. Clarke of the National Association of Tax Administrators; David E. Hething, vice president of the National Conference of State Legislatures, and Kent Conrad, chairman of the Multistate Tax Commission. Conrad is also North Dakota's tax commissioner.
"Such a new and unnecessary deadline ignores the fact that legislative and executive action by both the federal and state governments may well require more than 11 months to complete," they said. "We reiterate our own opposition to federal restrictions on the states' authority to design their tax policies."
The issue involves a tax concept under which a state collects taxes from a corporation based on a formula that takes into account the corporation's worldwide earnings. A dozen states have adopted such a policy, although some states have recently moved to alter their approach. In California, an effort to alter the tax plan apparently died for the year when the state legislature adjourned yesterday without taking action on the measure.
Major multinational corporations have opposed the unitary tax method. In addition, the Reagan administration has been lobbied by some of its major trading partners, who also oppose the taxes.
The seven state officials, in addition to differing with Regan over the threat of federal pressure, also said that his report of the group's positions on a few issues was not completely accurate and attached a report that they said better portrayed where members of the group stand.