A lobby group representing several major corporations urged Congress to pass a bill aimed at clarifying when companies face corporate taxes for remote sales from other states.
The measure, known as 'The Business Activity Tax Simplification Act,' seeks to resolve the issue of states seeking to collect business activity taxes from businesses headquartered in other states by setting out specific guidelines for when an out-of-state business may be charged a tax for doing business in a state.
Over the past several years, a growing number of states have sought to collect business activity taxes from businesses in other states. The problem is that different states use different standards for determining what constitutes sufficient contacts with a state to justify taxation. This has resulted in businesses being deterred from expanding their presence in other states for fear of exposure to further taxation, and it is becoming a growing concern for internet-based companies in particular.
The proposals have been attacked by the National Governors Association and other state and local government officials, who fear the bill would put a "major strain" on state treasuries.
However, bill's sponsor Mr Goodlatte has cited numerous other examples of "aggressive state actions" and positions against out-of-state companies.
He says that this legislation will ensure that businesses are not subject to double taxation at the state level, which will ultimately facilitate the continued growth of e-commerce, job creation and the overall strength of the American economy. |
