Small Online Sellers Face Specter of New State Income Taxes

Aug. 30, 2021, 8:45 AM

Online merchants face paying income taxes in dozens of additional states if revenue agencies adopt a new interpretation of a federal law that has protected out-of-state sellers for 60 years.

Revenue officials in Colorado, Illinois, Oregon, and Utah are studying how to implement some or all of a statement on Public Law 86-272, recently revised by the influential Multistate Tax Commission to reflect the impact of e-commerce on the broader economy. Other states could take similar action, based on their previous adoptions of the the commission’s principles through guidance and tax positions taken during audits.

The shift in state ...

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