A state tax shakedown
The battle against out-of-state corporate income tax heats up.
by Ian Mount, FSB Magazine contributor

(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?

illu_states.03.jpg

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.

__________

Related:

You've earned it. Let it grow.

More and more retirees are launching their own start-ups. Top of page

To write a note to the editor about this article, click here.

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.