Small businesses must be protected from inappropriate state taxation, according to Consumer Electronics Association Senior Vice President of Government Affairs Michael Petricone who testified before Congress today in support of H.R. 5627, the Business Activity Tax Simplification Act (BATSA).
Introduced by Representatives Rick Boucher (D-VA) and Bob Goodlatte (R-VA), BATSA will provide relief and greater clarity for small businesses that are currently being threatened with onerous income and franchise taxes despite having no physical presence in the taxing state. The bill provides a bright line definition of physical presence and preempts states from taxing corporations with no such presence.
“Small businesses are the lifeblood of the U.S. economy, but these taxes chill investment and violate the U.S. constitution by unduly burdening the free flow of interstate commerce,” Petricone says. “Business expansion is chilled, especially when it comes to electronic commerce, which inherently crosses state borders. This legislation provides vital relief to America’s small businesses.”
Petricone added CEA’s member companies are not seeking relief from legitimate taxation, but rather endorsement of the principle that a tax should not be imposed by a state unless that state provides benefits or protections to the taxpayer.
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