Podcast with Attorney Dirk Giseburt on the Limits of State Tax Authority

This week on the Tax Policy Podcast I talk with Dirk Giseburt, Seattle-based attorney and Partner at Davis Wright Tremaine LLP. Dirk also served as the Counsel of Record on the Tax Foundation’s recent Supreme Court brief in the case of Lamtec v. Department of Revenue of the State of Washington. The case challenges the right of a state to levy a business activity tax on an out-of-state corporation which has no physical presence in the state.

Many states have been attempting to expand their taxing authority to companies that merely have in-state customers or sales affiliates, rather than in-state facilities. As Dirk explains in the podcast, this violates the “Benefit Principle,” which holds that only entities that benefit from government programs should be required to contribute to their costs. A company that has no offices or facilities in a state certainly doesn’t qualify under that test.

You can read more about the limits of state taxing authority (including nexus, the streamlined sales tax project, and “Amazon” taxes) here.