INTERSTATE COMMERCE: The State Tax Grab: Cash-hungry governments are shaking down nonresident businesses and workers.
Until recently, one of the most aggressive—and, to businesses, infuriating—assertions of tax nexus took place in New Jersey. According to congressional testimony by owners of trucking companies and the American Trucking Associations, beginning around 2000, revenue agents from New Jersey’s department of taxation began descending on truck stops, weigh stations, and loading docks and waylaying trucks, demanding that the owners pay at least Jersey’s $1,100 minimum corporate-franchise tax before letting the drivers proceed. Many of the vehicles—about 40,000 have been stopped—worked for companies with zero connection to New Jersey, other than making a pickup or delivery there. New Jersey was, in essence, charging a $1,100 entry fee into the state. . . .
Robert Pitcher, vice president of government relations for the American Trucking Associations, notes that New Jersey’s aggressive tax posture has eased since the 2009 election of Governor Chris Christie, who has vowed to improve the state’s business climate. But Pitcher believes that, without congressional action, the state could resume its accosting of trucks at any time.
Related: Michael Barone: Congress needs to stop state tax shakedowns.