One of the pieces of legislation currently pending before Congress that has the potential to significantly affect franchisors is the Business Activity Tax Simplification Act, or BATSA. BATSA would clarify federal tax law by resolving the question of economic “nexus” that is required for a state to succesfully impose an income tax on out-of-state companies.
Tag: physical presence
Iowa Supreme Court Orders Out-Of-State Franchisor To Pay Tax On Royalty Income
Last week, the Iowa Supreme Court issued a ruling that will require out-of-state franchisors to pay tax on income earned through royalties earned from Iowa-based franchisees. The decision has implications for any business that derives income from intangible assets (through licensing or otherwise) located in another state.
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