House panel clears state tax bills

The House Judiciary Committee approved a trio of bills dealing with states’ taxing powers in the increasingly digital economy on Wednesday.

One measure, which passed the panel by voice vote, would prevent consumers from getting taxed by multiple states for the same goods or services. 

{mosads}Another bill, the Business Activity Tax Simplification Act, would only allow states to tax a company if it has physically been doing business in the state for at least two weeks. The Judiciary panel passed that bill on an 18-7 votes. Previous versions of the bill passed the committee in 2006 and 2011, but didn’t get a vote on the House floor. 

And the committee passed a bipartisan measure would only allow states to charge income taxes on nonresidents if they worked in the state for at least 30 days.

House Judiciary Chairman Bob Goodlatte (R-Va.) applauded the committee for clearing the three bills, which he said would remove impediments to the growth of the digital economy.

But the committee has yet to move on a bill dealing with one of the larger issues in state taxation: whether or not to allow states to tax online retailers that don’t have a physical presence in the state.