Federal Tax Shield Doesn’t Cover Travel Company, Wisconsin Says

A federal safe harbor from state income tax doesn’t apply to a travel services company seeking Wisconsin Supreme Court review of an assessment, the state revenue department said Thursday.

The case concerns Public Law 86-272—the federal law that prohibits states from imposing income taxes on out-of-state businesses that only solicit sales of tangible personal property in the state. Florida-based ASAP Cruises Inc. told the justices in its July petition for review that no federal or state court has considered how PL 86-272 applies to out-of-state sellers with in-state business activities below the law’s lower limit.

But PL 86-272 only protects ...