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The House Judiciary Committee approved the so-called “Business Activity Tax Simplification Act” (BATSA), H.R. 1439 today.
Corporate lobbyist pushing this bill make the deceptive argument that simplification will result from limiting state and local governments to taxing only those businesses that have a “physical” presence in the state.
The “physical presence” standard doesn’t make any sense in the internet age, when we all buy so many goods and services from companies that do not have physical facilities in our state but still benefit from the state and local services that make commerce possible.
In any event, BATSA does not create a “physical presence” standard anyway because it has so many loopholes allowing large corporations with lobbying clout to avoid state and local taxes even though they have what any rational person would call a “physical presence” in the jurisdiction.
In May, CTJ sent a letter to the subcommittee handling the bill, explaining that we oppose BATSA because it would:
1. make state and local taxes on businesses dramatically more complex,
2. increase litigation related to business taxes,
3. increase government interference in the market and
4. reduce revenue to state and local governments by billions of dollars each year.
Read CTJ’s letter opposing the misnamed “Business Activity Tax Simplification Act” (BATSA).