Jun 22, 2015
From KPMG TaxWatch
On June 17, 2015, members of the House Judiciary Committee approved and reported three federal bills addressing state taxation to the House floor. Timing of floor consideration is unclear.
The Committee first addressed H.R. 2315, the “Mobile Workforce State Income Tax Simplification Act of 2015.” The Mobile Workforce legislation limits a state’s authority to tax the income of nonresident employees present in a state for fewer than 30 days. The uniform standard would also apply for determining when a state may require an employer to withhold taxes on nonresident employees performing services in the state. After New York state representatives voiced their objections to the bill, it was passed out of the committee by a 23-4 vote.
The committee next considered H.R. 1643, the “Digital Goods and Services Tax Fairness Act of 2015.” This bill would require all states to follow uniform sales and use tax sourcing rules for sales digital goods and would also prohibits discriminatory and multiple taxation of digital goods. After the approving certain technical amendments, the bill passed on voice vote. Finally, the committee discussed H.R. 2584, the “Business Activity Tax Simplification Act of 2015,” or “BATSA.” BATSA would require that a taxpayer be physically present in a state for a minimum of 14 days prior to the state subjecting the taxpayer to business activity taxes (such as income, franchise, or gross receipts taxes). It would also apply the restrictions of P.L. 86-272 to sellers of other than tangible personal property. Opponents of the bill noted that BATSA, if passed, is estimated to cost states $2 billion in the first year alone, with the annual cost likely increasing each year. The bill ultimately passed the committee with an 18-7 vote. For more information on the three nexus bills discussed during the House Judiciary Committee meeting, please contact Loren Chumley at (615) 248-5565 or Harley Duncan at (202) 533-3254.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.