The Kentucky Chamber of Commerce and Greater Louisville Inc. (GLI) sent a joint letter to the federal delegation Wednesday in support of two state tax bills: the Mobile Workforce State Income Tax Simplification Act (H.R. 2315) and the Business Activity Tax Simplification Act (H.R. 2584).
The Mobile Workforce State Income Tax Simplification Act (H.R. 2315) prevents states from imposing or collecting income tax on those in a state for less than thirty days. This bill would simplify the onerous burdens placed on employees who travel outside their resident state for temporary periods and on employers who have corresponding withholdings. Most individuals are not aware of this patchwork of nonresident state income tax filing rules, and many employers are required to incur extraordinary expenses to comply with withholding requirements.
In the letter, the Kentucky Chamber and GLI expressed concern that the policy not only discourages businesses from interstate travel, but hinders the success and influence that businesses can have on the national market.
The Business Activity Tax Simplification Act (H.R. 2584) prevents states from imposing corporate income taxes and gross receipt taxes on businesses with a physical presence in the state for less than fourteen days. The current state of the law has resulted in countless stories of businesses subject to years of back taxes that have no property or employees in that state.
The Chamber and GLI considered this effect very detrimental to the encouragement and the success of businesses as the state of the law should be one that encourages entrepreneurship, free trade, and limit hurdles to that process. If enacted, this bill would promote the movement of goods and services interstate without the fear that businesses could face unfair and unexpected obstacles to that objective.