In the meantime, even foreigners have noticed how silly — and economically dangerous — the situation is. The ambassadors from France, Switzerland and the Netherlands wrote earlier this year to the governor of New Jersey to complain about its extraterritorial taxation regime, which asks for tax payments even from companies headquartered abroad.
It’s time for Congress to step in.
BATSA does nothing to undermine the ability of states and localities to impose taxes. Rather, it rationalizes and finally makes uniform what the courts have long said should be the law of the land. Corporate taxes should be imposed only on companies that have some meaningful presence in the state. Congress has the chance to do the right thing.
Virginia Reps. Bob Goodlatte (R) and Bobby Scott (D) serve on the Judiciary Committee, where Goodlatte is chairman of the Subcommittee on Intellectual Property, Competition and the Internet.