HR 427
Interstate Commerce Simplification Act of 2025
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Bill overview
This bill changes the way states can tax businesses that sell goods across state lines. Currently, states are limited in taxing income from interstate commerce if their only activity within the state is asking for orders to sell tangible goods. The bill expands this restriction to include any business activity that helps with soliciting orders, even if that activity has a separate, valuable purpose beyond just selling products.
Key provisions
- Expands the definition of ‘solicitation of orders’ to include activities facilitating order requests.
- Broadens the prohibition on state income taxes on interstate commerce.
- Applies to business activities beyond simply requesting sales.
- Specifically addresses business functions separate from order solicitation.
- Modifies Public Law 86–272 to implement the changes.
Who is affected
- States
- Businesses engaged in interstate commerce
- Online retailers
- Manufacturers
- Sellers of tangible personal property
Notable changes
- Previously, states could only tax income from interstate commerce if the only activity was soliciting orders.
- Now, states cannot tax any business activity that facilitates order solicitation, regardless of its other functions.
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119th CONGRESS — 1st Session
H. R. 427
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend Public Law 86–272 to expand the prohibition of State taxation relating to certain solicitation of orders.
This Act may be cited as the Interstate Commerce Simplification Act of 2025
.
Section 101(d) of Public Law 86–272 (73 Stat. 555) is amended—
in paragraph (1) by striking and
at the end,
in paragraph (2) by striking the period at the end and inserting ; and
, and
by adding at the end the following:
the term solicitation of orders
means any business activity that facilitates the solicitation of orders even if that activity may also serve some independently valuable business function apart from solicitation.