The National Marine Manufacturers Association and other business organizations lobbied hard last year for passage of the Business Activity Tax Simplification Act.
"The last Congress made significant progress," says Matthew Dunn, NMMA's legislative director. "It went all the way to the floor of the House, but then it stalled."
In mid-February, U.S. Reps. Rick Boucher, D-Va., and Bob Goodlatte, R-Va., reintroduced the legislation, along with nine original bipartisan co-sponsors. The bill, H.R. 1083, spells out the conditions that must be met for states to levy business activity taxes on out-of-state businesses.
BATSA would establish a "bright-line" physical presence nexus standard governing state assessment of corporate income taxes and comparable levies. A business would have to own or lease real or tangible property, or assign one or more employees to perform certain activities in the taxing state for more than 15 days in a taxable year.
The bill also would modernize Public Law 86-272, which prohibits states from assessing net income taxes against a business if its only contact with the state involves the solicitation of orders for tangible personal property. The change would allow the law to apply to intangible property and services and cover taxes that have replaced net income taxes.
The bill has not yet been introduced in the Senate. Dunn says the goal is to build support in the House first. He says the legislation has a good chance of passage because it has strong bipartisan support, a strong congressional record from last year and would prove to be a good way to stimulate business and create jobs.
This article originally appeared in the April 2009 issue.