The Business Activity Tax Simplification Act (BATSA), a bipartisan measure co-sponsored by Reps. Bob Goodlatte (R-VA) and Bobby Scott (D-VA), would set a uniform standard for so-called business activity taxes. Under the legislation, states would only be able to impose business activity taxes on companies that have a meaningful physical presence in that state. A state could not impose corporate income-based taxes on businesses for merely soliciting sales in the state. Rather, states could only impose these taxes on companies that have employees in that state or that own or lease property there.
BATSA would apply to all business activities taxes, which include corporate income taxes, gross receipts taxes, gross profits taxes and single businesses taxes. It would NOT apply to sales taxes.
BATSA would:
- Ensure that companies are taxed fairly and uniformly
- Create a clear standard and eliminate confusion for tax administrators and companies
- Reduce lawsuits and guesswork about when a company’s income is taxed by states
- Encourage investment and job creation by freeing up profits otherwise wasted by unnecessary tax litigation and preparation
- Free companies to conduct long-term strategic planning without fear of unexpected taxation
- Stop over-taxation caused by state-by-state overreach
BATSA would NOT:
- Impact sales tax collections in any way
- Impose any change on individuals or companies that buy products online