BATSA Would Establish Uniform Physical Presence Standard

February 4, 2010

My colleague Joe Henchman, the Tax Foundation’s Tax Counsel and Director of State Projects, is submitting written testimony today to the House Judiciary Commercial and Administrative Law Subcommittee on the Business Activity Tax Simplification Act, which would establish a clear physical presence standard to apply to online retail transactions and prevent burdening interstate commerce.

The subcommittee is scheduled to host a hearing titled “State Taxation: The Role of Congress in Defining Nexus” today at 11 a.m.

“Our written testimony makes two broad points,” Henchman writes. “First, the physical presence standard limits destructive and likely unconstitutional state efforts to export tax burdens, efforts that stifle interstate commerce and harm economic growth. Second, a uniform physical presence standard would decrease transaction costs for interstate commerce, especially small businesses using mail and the Internet.”

Read the full statement, “A Uniform Physical Presence Standard Would Limit Destructive State Efforts to Export Tax Burdens.”

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