[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6363-1]

[Page 332-334]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
               Seizure of Property for Collection of Taxes
 
Sec. 301.6363-1  State agreements.

    (a) Notice of election. If a State elects to enter into a State 
agreement it shall file notice of such election with the Secretary or 
his delegate. The notice of election shall include the following:
    (1) Statement by the Governor. A written statement by the Governor 
of the electing State:
    (i) Requesting that the Secretary enter into a State agreement, and
    (ii) Binding the Governor and his successors in office to notify the 
Secretary or his delegate immediately of the enactment, between the time 
of the filing of the notice of election and the time of the execution of 
the State agreement, of any law of that State which meets the 
description given in any of the subdivisions of subparagraph (2) of this 
paragraph (a), whether or not such law is intended to be administered by 
the United States pursuant to subchapter E.
    (2) Copy of State laws. Certified copies of all laws of that State 
described in any of the following subdivisions of this subparagraph, and 
a specification of laws described in subdivision (i) of this 
subparagraph as ``subchapter E laws'', of laws described in subdivision 
(ii) as ``other tax laws'', of laws described in subdivision (iii) as 
``non-tax laws'', and of laws described in subdivision (iv) as 
``interstate cooperation laws'':
    (i) All of the State individual income tax laws (including laws 
relating to the collection or administration of such taxes or to the 
prosecution of alleged civil or criminal violations with respect to such 
taxes) which the State would expect the United States to administer 
pursuant to subchapter E if the State agreement is executed as 
requested. In order to have a valid notice, the State must have a tax 
which would meet the requirements for qualification specified in section 
6362 and the regulations thereunder if a State agreement were in effect 
with respect thereto, with no conditions attached to the effectiveness 
of such tax other than the execution of a State agreement. Such tax must 
be effective no later than the January 1 specified in the State's notice 
of election as the date as of which subchapter E is desired to become 
applicable to the electing State, except that such effective date shall 
be deferred to the date provided in the State agreement for the 
beginning of applicability of subchapter E to the State, if the latter 
date is different from the date specified in the notice of election.
    (ii) All of the State income tax laws applicable to individuals 
(including laws relating to the collection or administration of such 
taxes or to the prosecution of alleged civil or criminal violations with 
respect to such taxes) which the State would not expect the United 
States to administer but which may be in effect simultaneously (for any 
period of time) with the State agreement.
    (iii) All of the State laws other than individual income tax laws 
which provide for the making of any payments by the State based on one 
or more criteria which the State may desire to

[[Page 333]]

verify by reference to information contained in returns of qualified 
taxes.
    (iv) All of the State laws which may be in effect simultaneously 
(for any period of time) with the State agreement and which provide for 
cooperation or reciprocal agreement between the electing State and 
another State with respect to income taxes applicable to individuals.
    (3) Approval by legislature or authorization by constitutional 
amendment. A certified copy of an Act or Resolution of the legislature 
of the electing State in which the legislature affirmatively expresses 
its approval of the State's entry into a State agreement, or a certified 
copy of an amendment to the constitution of such State by which the 
voters of the State affirmatively authorize such entry.
    (4) Opinion by State Attorney General or judgment of highest court. 
A written statement by the State Attorney General to the effect that, in 
his opinion, no provision of the State's Constitution would be violated 
by the State law's incorporation by reference of the Federal individual 
income tax laws and regulations, as amended from time to time, by the 
Federal prosecution and trial of individuals who are alleged to have 
committed crimes with respect to the State's qualified tax (when it goes 
into effect as such), or by any other provision relating to such tax, 
considered as of the time it is being collected and administered by the 
Federal Government pursuant to subchapter E. However, if such a 
statement is not included in the notice of election, a judgment of the 
highest court of the State to the same effect may be submitted in its 
place.
    (5) Effective date. A written specification of the January as of 
which subchapter E is desired to become applicable to the electing 
State.
    (b) Rules relating to time for filing notice of election. An 
electing State must file its notice of election more than 6 months prior 
to the January 1 as of which the notice specifies that the provisions of 
subchapter E are desired to become applicable to such State. Thus, for 
example, if the date specified in the notice is January 1, 1979, the 
notice must be filed no later than June 30, 1978. However, because under 
the provisions of section 204(b) of the Federal-State Tax Collection Act 
of 1972 (86 Stat. 945), as amended by section 2116(a) of the Tax Reform 
Act of 1976 (90 Stat. 1910), the provisions of subchapter E will 
initially take effect on the first January 1 which is more than 1 year 
after the first date on which at least one State has filed a notice of 
its election (see Sec. 301.6361-5), the notice of an election which 
causes subchapter E to initially take effect must be filed with the 
Secretary or his delegate more than 1 year prior to the January 1 as of 
which such notice specifies that the provisions of subchapter E are 
desired to become applicable to such State. Thus, for example, if such 
an initially electing State desires to elect subchapter E as of January 
1, 1979, its notice must be filed no later than December 31, 1977. For 
purposes of this section, if the notice of election is sent by either 
registered or certified mail to the Secretary of the Treasury, 
Washington, D.C. 20220, then it shall be deemed to be filed on the date 
of mailing; otherwise, the notice of election shall be deemed to be 
filed when it is received by the Secretary or his delegate.
    (c) Procedures relating to defects in notice or tax laws. If a State 
has filed a notice of election, then the Secretary shall, within 90 days 
after the notice is filed, notify the Governor of such State in writing 
of any defect in the notice of election which prevents it from being 
valid, and of any defect in the State's tax laws which causes the tax 
submitted to fail to meet the requirements for qualification specified 
in section 6362 and the regulations thereunder, other than the fact that 
no State agreement is in effect with respect thereto. Any such defect of 
which the Secretary does not notify the Governor within such 90-day 
period is waived. The Secretary or his delegate may, in his discretion, 
permit any of such defects of which the Governor is timely notified to 
be cured retroactively to the date of the filing of the notice of 
election, by amendment of the notice or the State law. Judicial review 
of the Secretary's determination that the notice of election or the tax 
laws, or both, contain defects, may

[[Page 334]]

be obtained as set forth in section 6363(d) and Sec. 301.6363-4.
    (d) Execution and contents of State agreement. If the Secretary does 
not timely notify the Governor of a defect in the notice of election or 
in the State's tax laws, as provided in paragraph (c) of this section, 
or if, as provided in such paragraph, all such defects have been cured 
retroactively, then the Secretary shall enter into a State agreement. 
The agreement shall include the following elements:
    (1) Effective date. The agreement shall specify the January 1 as of 
which subchapter E will commence to be applicable to the State. Such 
date shall be the same as that specified in the notice of election 
pursuant to paragraph (a)(5) of this section, unless the parties agree 
to a different January 1, except that in no event shall a State 
agreement executed after November 1 specify the next January 1.
    (2) Obligation of Governor to notify the United States of changes in 
pertinent State laws. The agreement shall require the Governor of the 
State, and his successors in office, to notify the Secretary or his 
delegate within 30 days of the enactment of any law of the State, after 
the execution of the agreement, of a type described in paragraph (a)(2) 
of this section.
    (3) Obligation of Governor to furnish to the United States 
information needed to administer State tax laws. The agreement shall 
require the Governor and his successors to furnish to the Secretary or 
his delegate any information needed by the Federal Government to 
administer the State tax laws. Such information shall include, for 
example, a list (which shall be maintained on a current basis) of those 
obligations of the State or its political subdivisions described in 
section 103(a)(1) from which the interest is not subject to the 
qualified taxes of the State.
    (4) Identification of State official to act as liaison with Federal 
Government. The agreement shall include a designation by the Governor of 
the State official or officials with whom the Secretary or his delegate 
should coordinate in connection with any questions or problems which may 
arise during the period for which the State agreement is effective, 
including those which may result from changes or contemplated changes in 
pertinent State laws.
    (5) Identification of State official to receive transferred funds. 
The agreement shall include a designation by the Governor of the State 
official who shall initially receive the funds on behalf of the State 
when they are transferred pursuant to section 6361(c) and Sec. 
301.6361-3.
    (6) Other obligations. If the Secretary and the Governor both so 
agree, the agreement shall provide for additional obligations.
    (e) State agreement superseding certain other agreements. For the 
period of its effectiveness, a State agreement shall supersede an 
otherwise effective agreement entered into by the State and the 
Secretary for the withholding of State income taxes from the 
compensation of Federal employees pursuant to 5 U.S.C. 5517 (or pursuant 
to 5 U.S.C. 5516, in the case of the District of Columbia).

[T.D. 7577, 43 FR 59373, Dec. 20, 1978]