The 2025 COST Spring Meeting, held April 28 – May 1 in New Orleans, was a deep dive into the evolving world of state and local taxation. With a packed agenda spanning economic forecasts, legislative updates, AI innovation, constitutional challenges, and taxpayer defense strategies, the event offered rich insights for in-house professionals, practitioners, and policymakers. Here’s a detailed recap of the sessions and themes that stood out.

Day 1: Monday, April 28 — Legislative Landscape and Opening Activities

The event opened with a State Tax Legislative Update, where COST leaders detailed the most active areas of state legislative development in 2025. This included:

• Sales tax expansion to digital goods and services

• New twists in combined reporting and tax base definitions

• Efforts in several states to conform—or not—to federal changes, such as IRC §174 amortization rules

In the afternoon, the COST and STRI Boards held brief meetings before attendees headed off-site for a vibrant welcome reception at the Double Dealer, setting a collaborative tone for the days ahead.

Day 2: Tuesday, April 29 — Economic Trends, Substance Doctrine, and Sales Tax Disputes

Opening Keynote: “Down, Up and Down Again?” This panel examined the post-pandemic economy’s effect on tax policy. Topics included interest rate volatility, remote work’s impact on nexus, and the balancing act between state surpluses and long-term revenue needs.

Substance Over Form Is Back A session on the economic substance and business purpose doctrines reminded attendees that despite taxpayer victories in some courts, state revenue departments are resurrecting these principles in audit disputes. Clear documentation, fact-driven planning, and contemporaneous intent remain essential.

TPP (Tangible Personal Property) Redefined and Weaponized This panel focused on how states are interpreting definitions of tangible personal property differently across tax types. Notably, panelists cited recent cases from Arizona, Louisiana, and New York, where identical statutory language led to conflicting results.

Artificial Intelligence and Tax In a standout session, attendees learned how Generative AI and machine learning are being adopted in tax compliance and research. Speakers demonstrated prompt engineering techniques, discussed risks of model hallucination, and introduced frameworks for integrating AI safely into daily workflows.

Key Apportionment Issues This session tackled:

• The significance of the apportionment formula denominator

• How special industry apportionment methods affect multi-industry groups

• Emerging issues in market-based sourcing and “fairness” standards

The Disappearing Credit Conundrum In “Here Today…Gone Tomorrow,” speakers addressed how large credit carryforwards and NOLs vanish through aggressive audit techniques or procedural traps. Taxpayers were warned to vigilantly track credits and understand the thresholds for offsetting taxes versus engaging in collection action.

MPU for Software and Services Another panel explored Multiple Points of Use (MPU) best practices, covering:

• License allocation

• Unassigned licenses

• Data-gathering methods

• Variations in treatment across key states like Texas, Washington, and New York

Settle or Fight? A tactical panel walked attendees through how to evaluate whether to settle or litigate, weighing litigation costs, discovery burdens, and reputational risks.

Administrative Deference Declines Attendees learned how state tax agencies increasingly issue guidance that overreaches statute, and how courts are growing more skeptical of deferring to these interpretations.

Transfer Pricing and Intercompany Transactions This session focused on how auditors challenge related-party pricing and what documentation strategies can strengthen a taxpayer’s defense.

Digital Taxation Trends Speakers addressed evolving rules on:

• Digital advertising

• Electronically delivered software and subscriptions

• Cloud-hosted platforms-as-a-service

Day 3: Wednesday, April 30 — Cross-Border Challenges, Apportionment, and Hidden Exemptions

Tax Administrator Roundtable Senior tax officials from Mississippi, Louisiana, New Jersey, and North Carolina discussed enforcement priorities, litigation trends, and post-Wayfair enforcement efforts in their jurisdictions. A highlight was insight into Louisiana’s centralization efforts for local sales tax administration.

Crossing Borders: Multinational Tax Complexity From GILTI inclusion to the application of IRC §174 and the implications of the OECD’s Pillar Two, this session painted a complex picture for multistate and multinational companies navigating inbound tax exposure.

Sales Tax Solution Maintenance In-house tax professionals were reminded not to treat tax software as “set it and forget it.” This session highlighted the importance of ongoing review of nexus, product mapping, and software updates.

State Income Tax Base Divergence This technical panel explored federal/state tax base differences, the lack of conformity on consolidated return rules, and how intercompany eliminations are treated differently for state purposes.

Apportioning Foreign Source Income With states increasingly taxing foreign dividends, Subpart F income, and GILTI, this panel explored alternative apportionment arguments, statistical data strategies, and audit-ready positioning.

Searching for Spare Change A practical and entertaining session showcased little-known sales and use tax exemptions by product, use, and purchaser—ranging from energy use exemptions to rarely claimed resale certificates.

ASU 2023-09 Accounting Update Panelists explained the FASB’s new disclosure requirements for income taxes, with emphasis on deferred tax liability reporting and disaggregation requirements for public filers.

Constitutional State Challenges From uniformity clauses to single-subject limitations, panelists dissected how state constitutions offer overlooked tools to invalidate tax laws, especially those adopted through rushed budget processes.

Tax-Motivated Investments: A Cautionary Tale Speakers warned that buying or selling Inflation Reduction Act tax credits can trigger unintended gain, recapture, or apportionment issues. Watch out for recapture indemnity payments and mismatches in treatment across states.

You’re Being Wayfaired! This humorous but serious panel dissected how Wayfair’s nexus standard is now being applied far beyond sales tax—often incorrectly. Attendees learned how to spot and push back against “Wayfair creep.”

Vendor Fair & Giveaways COST hosted a Vendor Fair featuring tax software providers, consultancies, and legal tech vendors, ending with a raffle and celebration.

Day 4: Thursday, May 1 — Ethics, Constitutional Law, and Closing Insights

Early Morning Ethics David Pope and Glenn McCoy led a thoughtful, practical ethics session, guiding tax professionals through gray areas in client representation, audit disclosures, and conflicts in multistate strategy.

Constitutional Issues This panel focused on cutting-edge cases invoking Commerce Clause, Due Process, Equal Protection, and Supremacy Clause arguments. Richard Pomp’s commentary was a highlight, offering sharp analysis on the limits of state taxing authority.

Top 10 Cases The fast-paced closing session reviewed ten of the year’s most influential cases, including decisions on:

• Combined reporting

• P.L. 86-272 and internet activities

• Retroactive tax laws

• Challenges to administrative rulemaking

Final Audit Session The meeting closed with a final closed-door audit session for COST industry members, covering audit trends across Southern and Mid-Atlantic states, including Florida, Georgia, Pennsylvania, and South Carolina.

Final Reflections

The 2025 COST Spring Meeting showed that multistate tax is anything but settled. With new legislative threats, unsettled case law, aggressive administrative guidance, and disruptive technology in play, practitioners must stay nimble, informed, and engaged.

In the words of several attendees: document thoroughly, think defensively, audit your own systems first, and never underestimate the power of constitutional argument.

© 2025 Jeanette Moffa. All Rights Reserved.