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This bill would get rid of a rule that generates tax revenue from multi-state businesses. The rule requires those businesses to pay taxes to the state on sales that are essentially “nowhere sales” – sales to the federal government or to untaxed entities.
Elimination of the rule was recommended by the state’s Tax Reform and Relief Legislative Task Force.
Potential Cost
In 2018, the Department of Finance and Administration estimated elimination of this rule would reduce state revenue by $24.5 million. In a recent news article, Rep. Howard Beaty Jr. estimated the reduction in state revenue from $25 million to $75 million.
Previous Attempts
In 2019, Senator Bart Hester (now Senate Pro Tem) led passage of SB 576, which included language that the legislature intends to repeal the rule “when the state’s budget would allow for that change to be enacted in a fiscally responsible manner.”
In 2021, Senator Jonathan Dismang filed SB 483 to fulfill that intent and repeal the throwback rule, but it died in Senate committee.