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Elliott Dubin, Director of Policy Research and Cameron Snow, Policy Research Intern, Multistate Tax Commission. This article refutes the hypothesis made by some persons and organizations that extending the protections of Public Law 86-272 to sales of services and intangibles would have a significant, positive effect on business investment. The proponents of imposing a federally mandated physical presence nexus standard argue it would greatly reduce the uncertainty caused by the complexity of current state business activity tax nexus standards; and, that the purportedly reduced uncertainty would result in a higher level of business investment. The authors find that current economic conditions and other factors far outweigh nexus standards in determining investment.
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