(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?

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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.

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