Interstate Commerce Simplification Act of 2025
This bill expands the definition of solicitation of orders to include business activities that serve an independently valuable business function apart from the solicitation of orders for purposes of the limitation on a state’s authority to impose a net income tax on an out-of-state seller.
Under current law, a state is prohibited from imposing a net income tax on income derived from within the state from interstate commerce if the only business activity within the state is the solicitation of orders for the sale of tangible personal property, provided that the orders are approved (or rejected) and filled by shipment or delivery from outside of the state. Further, the Supreme Court has held that the term solicitation of orders includes (1) activities that are strictly essential to making requests for purchases, and (2) ancillary activities that serve no independent business function apart from their connection to requests for purchases.
Under the bill, the definition of solicitation of orders is expanded to include business activities that facilitate the solicitation of orders even if such business activities serve an independently valuable business function apart from the solicitation.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 427 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 427
To amend Public Law 86-272 to expand the prohibition of State taxation
relating to certain solicitation of orders.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 15, 2025
Mr. Fitzgerald (for himself, Mr. Grothman, Mr. Tiffany, and Mr. Steil)
introduced the following bill; which was referred to the Committee on
the Judiciary
_______________________________________________________________________
A BILL
To amend Public Law 86-272 to expand the prohibition of State taxation
relating to certain solicitation of orders.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Interstate Commerce Simplification
Act of 2025''.
SEC. 2. AMENDMENT.
Section 101(d) of Public Law 86-272 (73 Stat. 555) is amended--
(1) in paragraph (1) by striking ``and'' at the end,
(2) in paragraph (2) by striking the period at the end and
inserting ``; and'', and
(3) by adding at the end the following:
``(3) the term `solicitation of orders' means any business
activity that facilitates the solicitation of orders even if
that activity may also serve some independently valuable
business function apart from solicitation.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
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