Bill to clear up state taxation powers gains support from NACDS, business

ALEXANDRIA, Va. A bill aimed at resolving the confusion over state taxation on out-of-state businesses is drawing widespread support from many business groups, including the National Association of Chain Drug Stores.

NACDS has joined a coalition of more than 100 businesses and organizations to support H.R. 5267, the Business Activity Simplification Act of 2008. Those groups have sent a joint letter urging passage of the bill to leaders of the U.S. House Judiciary Committee and the Subcommittee on Commercial and Administrative Law.

The law is aimed at curbing an increasingly common practice among some states to tax out-of-state businesses that have minimal contact within their boundaries. The practice—by which businesses can be taxed even for occasionally routing their trucks through a particular state, without either pickup up or dropping off goods—has had a chilling effect on some companies’ expansion plans, according to the coalition.

So, too, has the assertion by some state policymakers that even “the presence of a website server is sufficient for imposing these taxes,” according to NACDS.

“BATSA would ensure fairness, minimize costly litigation for both state governments and taxpayers and create the kind of legally certain and stable business environment that encourages business to make investments, expand interstate commerce and create new jobs,” the letter stated. “At the same time, the bill would ensure that businesses continue to pay business activity taxes to states that provide them with direct benefits and protections.”

Weighing into the issue, NACDS president and chief executive officer Steven Anderson praised the bill’s authors. ““We applaud Rep. Rick Boucher, D-Va., and Rep. Bob Goodlatte, R-Va., for their leadership in clarifying this tax structure,” said Anderson. “This legislation will help foster a better business environment for NACDS member companies and their suppliers across the country.”