Remote Sellers Could Have Income Tax Duties in Multiple States

Businesses interacting with customers through e-commerce portals to solicit credit applications, provide maintenance services or install internet cookies to collect data probably have income tax liabilities in the customer’s state under a legal interpretation gaining support at the Multistate Tax Commission.

The commission’s Uniformity Committee approved a report Wednesday reinterpreting Public Law 86-272, a 1959 federal law prohibiting states and local taxing jurisdictions from imposing income taxes on out-of-state businesses for activities limited to soliciting sales of tangible personal property.

The report now heads to the commission’s Executive Committee for consideration, one of two recommendations made Wednesday.