Coalition to Protect Interstate Commerce
Applauds Introduction of The “Business Activity Tax Simplification Act of 2008”
(Washington, DC) -- Today the Coalition to Protect Interstate Commerce (CPIC) applauded Representatives Rick Boucher (D-VA), Bob Goodlatte (R-VA), and the other original cosponsors for introducing the “Business Activity Tax Simplification Act of 2008,” which clarifies that state taxation of business income requires a physical presence within the taxing state.
"We applaud Representatives Boucher, Goodlatte and the other key House members for introducing bipartisan legislation that will simplify the needlessly complex tax systems that entrepreneurs and businesses must face when deciding whether to expand their businesses across state lines,” said Tara Bradshaw, spokeswoman for the Coalition to Protect Interstate Commerce.
The Business Activity Tax Simplification Act of 2008 is cosponsored by Congressmen Artur Davis (D-AL), Chabot (R-OH), Herseth Sandlin (D-SD), Feeney (R-FL), Jackson-Lee (D-TX), Gallegly (R-CA), Hank Johnson (D-GA), Pence (R-IN), Lofgren (D-CA), Bobby Scott (D-VA) and Wexler (D-FL). The legislation will be referred to the House Judiciary Committee, on which Boucher, Goodlatte and most of the other cosponsors serve.
Many states are aggressively trying to subject companies with no physical property or employees to taxes, simply because customers are located in the state. This unfair tax treatment subjects businesses to a complex, unpredictable, and unfriendly business environment, where ultimately, these costs get passed on to consumers. Businesses are forced to spend more time, money, and energy on litigation and accounting as they try to navigate through the complexities and
chaos of an arcane tax system, leaving economic growth and sustainability by the wayside.
Congress has an obligation to curtail state taxation that impermissibly burdens interstate commerce. The Business Activity Tax Simplification Act of 2008 would set forth a bright-line standard clarifying that states and localities may collect business activity taxes from out-of-state entities only when they have a physical presence in the taxing state. It would also modernize Public Law 86-272, which Congress enacted forty-nine years ago. As currently written, that law prohibits the states from assessing net income-based taxes against a business when its only contact with the state involves the solicitation of orders in the state for tangible personal property. BATSA would modernize P.L. 86-272, so that in addition to tangible personal property, it would also apply to intangible property and services. Furthermore, it would apply to all direct taxes on a business, not just those based on net income.