House Judiciary Committee Urged To Act on Business Activity Tax Act

Daily Tax Report
April 3, 2008

The Coalition to Protect Interstate Commerce and more than 100 businesses April 2 sent a letter to House Judiciary Committee Chairman John Conyers Jr. (D-Mich.) and Subcommittee on Commercial and Administrative Law Chairwoman Linda Sanchez (D-Calif.) urging committee action on the Business Activity Tax Simplification Act of 2008 (H.R. 5267).

The bill would set national guidelines for when a business would be considered to have physical nexus with a state, with one general guideline being that a company must use employees or services in a state for 15 days or more in a calendar year before it is liable to pay business activity taxes to that jurisdiction (26 DTR G-5, 2/8/08).

"The Business Activity Tax Simplification Act of 2008 would create bright line tests to ensure that states continue to have the ability to tax businesses that operate within their borders, employ people and have property within their boundaries, and utilize the services those states and municipalities provide," a news release from the coalition said.

"However, the legislation also clarifies that 'doing business in a state' does not mean simply having customers in the state," it said.

The House Small Business Committee held a hearing on the legislation Feb. 14 (31 DTR G-3, 02/15/08).

Text of the letter is in TaxCore.