Legislative update: State and local tax treatment of physical presence

State and local tax treatment of physical presence

The House Judiciary Committee today approved three state and local tax-related bills. All are expected to be reported to the House, although it is unclear when the House may proceed to a vote on the bills. The bills are:

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  • The Business Activity Tax Simplification Act of 2015 (H.R. 2584). Approved by a committee vote of 18-7, the measure would attempt to codify the minimum physical presence required of a business prior to the imposition of income taxes upon that business by state and local governments.
  • The Mobile Workforce State Income Tax Simplification Act of 2015 (H.R. 2315). Approved by a 23-4 vote, the bill would create a 30-day per calendar year-threshold standard for state and local taxation of employees who travel to multiple states to perform work-related duties. The 30-day standard would also apply for determining when a state may require the withholding and remittance of state income taxes by the employer.
  • The Digital Goods and Services Tax Fairness Act of 2015 (H.R. 1643). Approved by voice vote, the bill would ban the imposition of discriminatory and multiple taxation of digital goods. Among other provisions, the bill includes sourcing rules designed to prevent double taxation by identifying the states and/or localities that possess primary taxing authority in a given scenario.

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