Submitted by B. Rowlands (not verified) on July 16, 2008 - 3:36am.
Our company sells software in all states to cities. We are a tiny company of 4 people yet we have sold to over 900 city and county governments. As the economy grows worse more and more governments are approaching us to file registration to pay tax in every jurisdication as a new way to generate more tax revenue.
While I have no problem paying our taxes we are like other typical small businesses in that our man power is limited. There is no way we can afford to file 900+ business licenses and tax returns every year. Each city in which we have customers claimes we have a "Nexus" with their city even though we don't have any employees or office there.
Unless PL 86-272 is modernized to require a physical presence before a city can tax a business this trend to tax out of state businesses, if continued, will grind the entire economy to a halt. Already our company is considering quitting business all together or at least withdrawing from some cities to reduce our paperwork / compliance burden. If other companies have the same problem with compliance costs of having to file so many business license applications every year and have to withdraw from interstate commerce because of the compliance load then modernization is truly needed.
We must modernize 86-272 now! If we don't then damage to the economy will be great in the next few years.
PL 86-272
Our company sells software in all states to cities. We are a tiny company of 4 people yet we have sold to over 900 city and county governments. As the economy grows worse more and more governments are approaching us to file registration to pay tax in every jurisdication as a new way to generate more tax revenue.
While I have no problem paying our taxes we are like other typical small businesses in that our man power is limited. There is no way we can afford to file 900+ business licenses and tax returns every year. Each city in which we have customers claimes we have a "Nexus" with their city even though we don't have any employees or office there.
Unless PL 86-272 is modernized to require a physical presence before a city can tax a business this trend to tax out of state businesses, if continued, will grind the entire economy to a halt. Already our company is considering quitting business all together or at least withdrawing from some cities to reduce our paperwork / compliance burden. If other companies have the same problem with compliance costs of having to file so many business license applications every year and have to withdraw from interstate commerce because of the compliance load then modernization is truly needed.
We must modernize 86-272 now! If we don't then damage to the economy will be great in the next few years.