A State Tax Shakedown

guiseppewv · 07-07-2006, 08:51 AM

Quote:

The battle against out-of-state corporate income tax heats up.
(FSB Magazine) -- Bo Horne doesn't own a business in New Jersey. The founder of ProHelp Systems, a Seneca, S.C., software firm, rarely even visits the Garden State and has received only $6,312 from sales there.

So why does New Jersey say that Horne owes it $600 a year in corporate income taxes?

Horne's small company is just one of many snared in disputes with state officials who hold that sale of a service or intellectual property in their jurisdiction means that the business has established operations there - a "nexus" - and thus owes taxes. (Other potential nexus-establishing offenses include driving a delivery truck within a state's borders.)

"The thought that a small home-based business like us could have to file income tax in 50 states and pay $30,000 a year in state taxes is ludicrous," Horne says.

Senators Charles Schumer [D-New York] and George Allen [R-Virginia] and four other co-sponsors have introduced a bill that would allow businesses like Horne's to be taxed only in their home states.

The bad news: The Senate is not expected to vote on the issue until next year at the earliest.

http://money.cnn.com/magazines/fsb/f...0532/index.htm

How is this even remotely legal? All this is doing now is killing small businesses. This is ridiculous.

Maarchk · 07-07-2006, 09:27 AM

Quote:

Originally Posted by guiseppewv

How is this even remotely legal? All this is doing now is killing small businesses. This is ridiculous.

It's the government, what they say becomes law, even if it wasn't before...
I agree that it will make businesses more scare. Imagine people that sell stamps across the country. If they make one out of state sale, they might go out of business.
Hopefully someone will put the kabash on this but who knows with our government.

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