U.S. Rep. Scott Fitzgerald
Press Release

Fitzgerald Introduces Bill to Protect Businesses from Double Income Taxation


By - Apr 16th, 2024 02:18 pm

WASHINGTON, DC – Congressman Scott Fitzgerald (WI-05) issued the following statement after introducing the Interstate Commerce Simplification Act. This bill would prevent states from applying their income tax to businesses who sell goods or services into a state but otherwise have no physical presence there.

Specifically, the bill would define the term “solicitation of orders” as “business activity that facilitates the solicitation of orders even if that activity may also serve some independently valuable business function apart from solicitation.”

“Without clear and concise guidance, overzealous states can pursue tax revenue from business owners simply for having a website. This ultimately leaves business owners with a mess of compliance burdens and vulnerable to double taxation. I’m proud to introduce the Interstate Commerce Simplification Act to promote consistent and uniform compliance that takes the burden off businesses and keeps our economy open for business,” said Rep. Fitzgerald.

BACKGROUND: Traditionally, income tax nexus has been ascertained through the presence of a physical establishment in the state or substantial economic activities beyond solicitation of orders. Under current law, a state may not impose its income tax on income derived within the state if the only business activities within the state are solicitation of orders for the sale of tangible personal property filled by shipment or delivery from a point outside the state. In so doing, states could open the floodgates for the roughly 2.5 million online retailers to have to pay income taxes to many more states, vastly increasing compliance burdens.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. It has not been verified for its accuracy or completeness.

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