Vision - September/October 2007 - (Page 36) tech POlicy news from washington ] • [ by michael petricone “Small businesses report that they are reducing investment, halting national advertising and refusing to accept customers from states that have been aggressive in levying out-ofstate business taxes.” Mark Harwood/Getty Images I Relieving Business Tax Burden Needless to say, the negative impact on innovation and economic activity is significant. Small businesses report that they are reducing investment, halting national advertising and refusing to accept customers from states that have been aggressive in levying out-of-state business taxes. These taxes also undercut one of the key benefits of the Internet, which allows small businesses to have a national customer base. This situation cannot continue. CE companies have no problem paying taxes when they have a physical presence in a state. However companies with no physical presence receive no benefits from the taxing entity like water, police or sanitation services. This is the ultimate “taxation without representation.” Thankfully, help may be on the way. With CEA’s support, Senators Schumer (DNY) and Durbin (R-IL) recently introduced the Business Tax Simplification Act (BATSA). This bill clarifies that a physical presence is needed before the imposition of business taxes, and makes clear that no taxes should be levied unless a state provides benefits or protections to a taxpayer. CEA aggressively is advocating this legislation in Congress. If you want to help in the campaign to support BATSA, contact Michael Petricone at michaelp@CE.org. • magine getting a tax bill from a state where you have no office, employees or physical presence. This is a growing reality for many CEA members faced with aggressive efforts to impose “business activity taxes” on out-ofstate firms. Increasingly, cash-starved states are dispensing with any physical presence requirement for taxation, and attempting to impose tax on the basis of Internet sales to customers, relationships with in-state distributors, or even the attendance of company employees at an in-state training seminar. The legal basis for these taxes is dubious. In 1992 The Supreme Court ruled in Quill v. North Dakota that states are prohibited from requiring sales taxes from remote sellers for sales within the jurisdiction. However, many states now take the unreasonably narrow position that the decision applies only to sales taxes, and that states are otherwise free to tax businesses with no in-state physical presence. The questionable legal status of these tax bills is of little consolation, especially to small businesses. Lacking huge resources for a protracted fight, many are forced to capitulate to these questionable tax demands in order to forestall larger penalties. September/October 2007 CEA Member Updates White House Audio On July 11, President George W. Bush cut the ribbon to reopen the renovated James S. Brady Press Briefing Room. Each of the diverse media entities at the Presidential briefings requires a clean audio feed from the podium to interface with their recording or broadcast equipment. The system used to route audio to these destinations (satellite uplinks and recording feeds) must accommodate all required audio sources, various digital audio formats and the complex audio routing required. Designers chose the Varizone digital audio distribution solution from Klotz Digital in Germany distributed in North America by Atlas Sound, a division of CEA member Mitek Corp. Each press control room operator now can select an audio source from the Varizone eight-button wall mounted controller to assign source destination, format and level while monitoring audio through a Varizone addressable digital amplifier driving an Atlas Sound loudspeaker. The Varizone digital bus architecture allows eight channels of simultaneous 16-bit 44.1K digital audio along with power for local amplification and a data stream for system monitoring and control, all on the same CAT5 cable infrastructure. To see the White House fact sheet visit: www.whitehouse.gov/news/ releases/2007/07/20070711-1.html. 36 www.ce.org http://www.whitehouse.gov/news/releases/2007/07/20070711-1.html http://www.whitehouse.gov/news/releases/2007/07/20070711-1.html http://www.ce.org
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