Money-hungry states are attempting to reach past state lines and impose business taxes on companies that aren’t within their borders.

The Business Activity Tax Simplification Act (BATSA), which was just reintroduced this week in the House by Congressman Steve Chabot, would stop greedy state governments from imposing these taxes outside their borders. Americans for Tax Reform signed a coalition letter urging Congress to pass the legislation and stop similar state tax intrusions.

In May, the Massachusetts Department of Revenue proposed to collect corporate income taxes on any business that has “considerable in-state sales derived through either economic or virtual contacts.” In other words, a Nevada-based company that sells products to Boston residents may be forced to pay Massachusetts’ corporate income tax.

The proposal cites last year’s Supreme Court decision on South Dakota v. Wayfair, which enables states to collect sales taxes on out-of-state businesses. Because of previous Supreme Court rulings (most notably Quill Corp. v. North Dakota), many states did not pursue levying business income taxes on companies that don’t own property or have employees within their borders.

Because Wayfair laid the groundwork to collect sales taxes on out-of-state companies, attempts to tax businesses’ income will likely increase.

Considering the huge impact e-commerce has on the economy, this unwarranted expansion of states’ power could have dramatic negative consequences. For one, increasing tax burdens and compliance costs would likely have a chilling effect on the economy as a whole.

Under BATSA, states would only be able to collect business activity taxes on companies that have a significant physical presence in the state. BATSA would set a simple standard: states can only levy business activity taxes on businesses that have property or employees within their borders.

In other words, BATSA would ensure that companies are taxed fairly and uniformly, while creating a clear nexus standard that would eliminate confusion and reduce lawsuits.

If businesses are less worried about unexpected taxation, they can focus their profits—which otherwise would be wasted on unnecessary tax litigation and preparation—on job creation and investment.

Congress has the Constitutional authority to shield citizens and companies from disastrous state tax laws. It should use this authority to keep overreaching states’ hands off of companies’ hard-earned revenues.

View the coalition letter in support of BATSA here.