Recently, more than 150 businesses nationwide wrote a letter to Speaker Boehner and Leader Pelosi urging them to enact the Business Activity Tax Simplification Act this year. The businesses, which include many franchise companies, want to put an end to confusing and costly state corporate income taxation. Under BATSA, a state would only be able to impose income-based taxes on companies that have a physical presence in that state. BATSA presents a rare opportunity for Congress to pass a bipartisan measure that will spur economic growth and job creation. See the press release from the Coalition for Interstate Tax Fairness and Job Growth below.
Washington, D.C., Feb. 29, 2012 – More than 150 businesses, trade associations and taxpayer groups from across the country penned a letter to House Speaker John Boehner and Democratic Leader Nancy Pelosi today, urging them to pass the Business Activity Tax Simplification Act (BATSA) this year to put an end to unfair, confusing and costly state corporate income taxation.
The letter represents the interests of small and large businesses and dozens of industries nationwide including retailing, trucking, banking, high tech, food services, manufacturing, shipping, medicine, media and many others. The signatories share the goal of getting Congress to act this year on BATSA (H.R. 1439), a bipartisan measure sponsored by Reps. Bob Goodlatte (R-Va.) and Bobby Scott (D-Va.) that would set a uniform standard for state taxation of the income of non-resident companies.
Under BATSA, a version of which has been introduced in every Congress since 2002, a state would only be able to impose income-based taxes on companies that have a physical presence in the taxing state. The bill would prohibit states from taxing the income of companies that merely solicit sales in the state. BATSA would NOT affect sales taxes.
“It is vital that Congress enact this important legislation this year,” said Jack O’Rourke, chairman of the Coalition for Interstate Tax Fairness and Job Growth, the leading advocate for BATSA. “These businesses, trade associations and taxpayer groups understand in a very real way the consequences of Congressional inaction: they will be forced to continue to pay unfair and unjustified corporate income tax assessments or engage in costly and time-consuming litigation to fight them. As a result, businesses will be deprived of money they need to expand, hire more employees or increase salaries. That’s bad for our economy.”
The letter explains to Speaker Boehner and Leader Pelosi why BATSA should be approved this year. Among other things, BATSA would create a “bright line” standard for business activity taxation, eliminate confusion for state tax administrators and businesses and reduce audits, lawsuits and guess work. It would also encourage economic development and job growth.
“Enactment of BATSA would lead to greater investment in U.S. business growth and jobs by clarifying the standards for imposition of business activity taxes by states and localities on multi-state businesses by resolving widespread uncertainty … if the bill were to become law, businesses would not be avoiding taxes. They would simply be paying taxes in the proper jurisdictions,” the letter says.
The House Judiciary Committee approved BATSA by voice vote and reported it to the full House last summer.© Copyright 2013 Armstrong Teasdale LLP. All rights reserved