CEA Testifies in Support of Small Businesses and the Business Activity Tax Simplification Act

February 15, 2008; 08:58 AM

ARLINGTON, Va.--(BUSINESS WIRE)--Small businesses must be protected from inappropriate state taxation, according to Consumer Electronics Association (CEA^®) Senior Vice President of Government Affairs Michael Petricone who testified before Congress today in support of H.R. 5627, the Business Activity Tax Simplification Act (BATSA).

Introduced by Representatives Rick Boucher (D-VA) and Bob Goodlatte (R-VA), BATSA will provide relief and greater clarity for small businesses that are currently being threatened with onerous income and franchise taxes despite having no physical presence in the taxing state. The bill provides a bright line definition of physical presence and preempts states from taxing corporations with no such presence.

“Small businesses are the lifeblood of the U.S. economy, but these taxes chill investment and violate the U.S. constitution by unduly burdening the free flow of interstate commerce,” Petricone said. “Business expansion is chilled, especially when it comes to electronic commerce, which inherently crosses state borders. This legislation provides vital relief to America’s small businesses.”

Petricone added CEA’s member companies are not seeking relief from legitimate taxation, but rather endorsement of the principle that a tax should not be imposed by a state unless that state provides benefits or protections to the taxpayer.

“‘No taxation without representation’ has been a basic American principle since the Declaration of Independence. It was the right idea then, and it’s the right idea now,” concluded Petricone.

About CEA:

The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the $161 billion U.S. consumer electronics industry. More than 2,200 companies enjoy the benefits of CEA membership, including legislative advocacy, market research, technical training and education, industry promotion and the fostering of business and strategic relationships. CEA also sponsors and manages the International CES – Where Entertainment, Technology and Business Converge. All profits from CES are reinvested into CEA’s industry services. Find CEA online at www.CE.org