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States Mulling Income Tax Expansion Under Multistate Tax Pact

Oct. 28, 2021, 7:06 PM

The Multistate Tax Commission is pushing states to expand the reach of their income tax regimes based on business taxpayers’ internet activities, but no state has adopted the intergovernmental body’s legal interpretation allowing such changes.

Richard Cram, director of the MTC’s national nexus program, said Thursday the states are still studying the commission’s revised statement on Public Law 86-272, a federal statute that prohibits states from imposing income taxes on out-of-state businesses if their only activity within the state is soliciting sales of tangible property. The revised statement endorses a general rule holding that businesses interacting with customers ...