Fiscal Times Discusses Taxes On Out-Of-State Franchise Companies
A recent article in Fiscal Times discusses the issue of state income tax on out-of-state franchisors, a trend that is growing in popularity among a variety of states. The CEO of Fastsigns, a company with 470 franchisees nationwide, is quoted as saying that her company (which is based in Texas) had to fork out income tax payments of more than $115,000 to Arizona, California, Missouri, Oregon, Pennsylvania, South Carolina and Wisconsin. This type of story is becoming more and more common as state look for ways to increase tax revenue.
The article also discusses the Business Activity Tax Simplification Act (BATSA), which I blogged about in my articles here, here and here. BATSA would significantly reduce the administrative burdens for franchisors and other companies that have "economic nexus" in multiple states. Thus far, BATSA has failed to gain significant traction despite its broad support among national companies. If you support BATSA, write your congressional representative.