Interstate Taxation Act

Interstate Taxation Act - Title I: Jurisdiction to Tax - Establishes uniform standards for the taxation by States of interstate business enterprises. Prohibits a State or its political subdivision from: (1) imposing a net income tax or capital stock tax on a corporation unless such corporation has a business location in the State; (2) requiring an individual to collect a sales or use tax unless such individual has a business location or regularly makes household deliveries in the State; or (3) imposing a gross receipts tax on the sale of tangible personal property unless the seller has a business location in the State.

Title II: Maximum Percentage of Income or Capital Attributable to Taxing Jurisdiction - Prohibits a State or its political subdivisions from imposing upon a corporation (other than an excluded corporation) with a business location in more than one State a net income tax which is greater than that amount calculated under a specified two-factor property, payroll apportionment formula.

Defines the property factor as a fraction, the numerator of which is the average value of the corporation's property in a State and the denominator being the average value of all the corporation's property located in any State in which the corporation has a business location. Values owned property at its original cost. Values leased property at eight times the gross rents payable by the corporation. Excludes property which has been permanently retired from use and tangible personal property rented out by the corporation to another person for one year or more.

Defines the payroll factor as a fraction, the numerator being wages paid in the State, and the denominator being the wages paid to all employees in any State.

Permits a State to impose a capital account tax upon a domiciliary corporation without division of capital, notwithstanding the jurisdictional standards and limits on attribution otherwise promulgated by this Act.

Title III: Sales and Use Taxes - Permits a State to impose a sales tax or require a seller to collect a sales or use tax on the interstate sale of tangible personal property if the destination of the sale is in that State or in a State or political subdivision for which the tax is required to be collected. Prohibits a State from imposing a use tax on the tangible personal property of persons without a business location or individuals without a dwelling place in that State. Permits States to collect sales and use taxes on motor vehicles registered in such States and on the consumption of motor fuels, notwithstanding the jurisdictional standards promulgated by this Act.

Prohibits a State from imposing a sales or use tax upon the cost or value of household goods, including motor vehicles, which an individual brings into that State upon establishing residence, if such goods were acquired 30 days or more before the individual established residence.

Excludes freight charges on interstate sales which are separately stated from the sales price for purposes of determining the sales or use tax.

Exempts a seller of tangible personal property in interstate commerce from liability for the collection or payment of a sales or use tax if he obtains from his buyer identification that the buyer is registered with the jurisdiction imposing the sales of use tax to collect or pay such tax, or a certificate indicating that the seller is exempt from the payment of such tax in that jurisdiction.

Title IV: Evaluation of State Progress - Requires the Committee on the Judiciary of the House of Representatives and the Committee on Finance of the Senate to evaluate during the four years following the enactment of this Act, the progress which the States and their political subdivisions are making in resolving the problems arising from State taxation of interstate commerce, and to make proposals for the resolution of such problems if the State have not made substantial progress toward their resolution.

Title V: Taxation of Individuals - Prohibits a State from taxing the income of an individual which was earned while such individual was not domiciled in such State (except to the extent that the income was earned from sources within the State), or which was earned from sources outside the State while the individual was domiciled in the State (except to the extent the tax exceeds any income tax paid on income to the State in which the income was earned).

Title VI: Definitions and Miscellaneous Provisions - Defines "excluded corporation" to be corporation which derives more than 50 percent of its ordinary gross income from the business of transportation for hire, telephone or telegraph service, the sale of electrical energy, gas, or water, insurance, or banking; and which receives such income from dividends, interest, or royalties; which is a personal holding company, or which has an average annual income in excess of $1,000,000.

Prohibits a State from imposing upon any person a greater liability for sales, use, or gross receipts tax on transactions which occur outside the State than for transactions which occur within such State.

Prohibits a State from charging a taxpayer for the cost of conducting an audit outside the State for a tax to which this Act applies. Prohibits a State from assessing taxes against any person for any period prior to the enactment of this Act.