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H.R. 2584, Business Activity Tax Simplification Act of 2015 1 (September 14, 2015)

handle is hein.congrec/cbo2555 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE September 14, 2015 H.R. 2584 Business Activity Tax Simplification Act of 2015 As ordered reported by the House Committee on the Judiciary on June 17, 2015 SUMMARY H.R. 2584 would prohibit state and local governments from taxing certain business activities that are taxable under current law. Specifically, it would prohibit those governments from taxing certain services, intangible goods, and media activities unless businesses providing those services have a physical presence-as defined in the bill-in the taxing jurisdiction. ESTIMATED COST TO THE FEDERAL GOVERNMENT CBO estimates that enacting H.R. 2584 would have no direct effect on the federal budget. Because enacting the bill would not affect direct spending or revenues, pay-as-you-go procedures do not apply. ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS H.R. 2584 would impose an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA) by prohibiting state and local governments from taxing certain business activities. CBO estimates that the costs-in the form of forgone revenues-to state and local governments would be more than $2 billion in the first full year after enactment and at least that amount in subsequent years. The cost would exceed the threshold established in UMRA for intergovernmental mandates ($77 million in 2015, adjusted annually for inflation). Current law (notably, Public Law 86-272 and related Supreme Court decisions) prohibits states from levying a tax on the net corporate income of a company whose only activity in the state is pursuing and making sales that would be filled from outside the state (for example, mail order sales). H.R. 2584 would expand that prohibition to other types of business activity taxes (BATs), including additional corporate income taxes, franchise taxes, single business taxes, capital taxes, gross receipt taxes, and business and occupation

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