Congressman Pat Harrigan Introduces the Business Activity Tax Simplification Act

Contact: Lexi Kranich (814) 380-4408

WASHINGTON, D.C.-Today, Congressman Pat Harrigan (NC-10) introduced the Business Activity Tax Simplification Act, legislation to modernize federal rules governing state taxation of interstate commerce by establishing a clear physical presence standard and updating existing protections to reflect today's digital economy.

"Businesses operating in multiple states should not have to guess where they owe taxes or fight conflicting claims from states where they have no employees, property, or actual operations. The current system has become increasingly inconsistent as states adopt different standards for determining when they can tax a business. By establishing a clear physical presence standard, the Business Activity Tax Simplification Act restores certainty, reduces compliance burdens, and ensures interstate commerce is governed by consistent rules instead of fifty different interpretations," said Congressman Harrigan.

The Business Activity Tax Simplification Act updates federal law to account for modern business activity, including digital goods and services, while establishing a uniform national standard for when states may impose business activity taxes on out-of-state companies. The legislation clarifies that businesses must maintain a meaningful physical presence in a state before being subject to certain state and local business taxes and extends existing federal protections beyond traditional net income taxes to other business activity taxes.

Congressman Harrigan will continue working to support economic growth, reduce unnecessary compliance burdens, and ensure interstate commerce can operate under clear and predictable rules.