Public Law 86–272
94–455
Statute Compilation
United States House of Representatives
Office of the Legislative Counsel
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
GPO Statute Compilations USLM converter, version 20210527.1
2021-10-15
Act of September 14, 1959
11575
86
1959-09-14
Public Law 86–272
[As Amended Through Public Law 94–455, Enacted October 4, 1976]
[Currency: This publication is a compilation of the text of Public Law 86-272. It was last amended by the public law listed in the As Amended Through note above and below at the bottom of each page of the pdf version and reflects current law through the date of the enactment of the public law listed at https://www.govinfo.gov/app/collection/comps/]
[Note: While this publication does not represent an official version of any Federal statute, substantial efforts have been made to ensure the accuracy of its contents. The official version of Federal law is found in the United States Statutes at Large and in the United States Code. The legal effect to be given to the Statutes at Large and the United States Code is established by statute (1 U.S.C. 112, 204).]
AN ACTRelating to the power of the States to impose net income taxes on income derived from interstate commerce, and authorizing studies by congressional committees of matters pertaining thereto.Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
<num style="-uslm-dtd:enum" value="I">TITLE I—</num><heading style="-uslm-dtd:header">IMPOSITION OF MINIMUM STANDARD </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/86/272/tI/s101" styleType="traditional">
<num style="-uslm-dtd:enum" value="101">Sec. 101. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s381">15 U.S.C. 381</ref><b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/86/272/tI/s101/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><chapeau style="-uslm-dtd:text">No State, or political subdivision thereof, shall have power to impose, for any taxable year ending after the date of the enactment of this Act, a net income tax on the income derived within such State by any person from interstate commerce if the only business activities within such State by or on behalf of such person during such taxable year are either, or both, of the following:</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s101/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">the solicitation of orders by such person, or his representative, in such State for sales of tangible personal property, which orders are sent outside the State for approval or rejection, and, if approved, are filled by shipment or delivery from a point outside the State; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s101/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">the solicitation of orders by such person, or his representative, in such State in the name of or for the benefit of a prospective customer of such person, if orders by such customer to such person to enable such customer to fill orders resulting from such solicitation are orders described in paragraph (1).</content>
</paragraph></subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/86/272/tI/s101/b" styleType="OLC" class="leftIndentDecrease1">
<num style="-uslm-dtd:enum" value="b">(b) </num><chapeau style="-uslm-dtd:text">The provisions of subsection (a) shall not apply to the imposition of a net income tax by any State, or political subdivision thereof, with respect to—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s101/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text"> any corporation which is incorporated under the laws of such State; or</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s101/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">any individual who, under the laws of such State, is domiciled in, or a resident of, such State.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/86/272/tI/s101/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><content style="-uslm-dtd:text">For purposes of subsection (a), a person shall not be considered to have engaged in business activities within a State during any taxable year merely by reason of sales in such State, or the solicitation of orders for sales in such State, of tangible personal property on behalf of such person by one or more independent contractors, or by reason of the maintenance of an office in such State by one or more independent contractors whose activities on behalf of such person in such State consist solely of making sales, or soliciting orders for sales, or tangible personal property.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/86/272/tI/s101/d" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">(d) </num><chapeau style="-uslm-dtd:text">For purposes of this section—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s101/d/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">the term “<quotedText style="-uslm-dtd:quote">independent contractor</quotedText>” means a commission agent, broker, or other independent contractor who is engaged in selling , or soliciting orders for the sale of, tangible personal property for more than one principal and who holds himself out as such in the regular course of his business activities; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s101/d/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">the term “<quotedText style="-uslm-dtd:quote">representative</quotedText>” does not include an independent contractor.</content>
</paragraph>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/86/272/tI/s102" styleType="traditional">
<num style="-uslm-dtd:enum" value="102">Sec. 102. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s382">15 U.S.C. 382</ref><b>]</b> </editorialNote><subsection style="-uslm-dtd:subsection" identifier="/us/sComp/86/272/tI/s102/a" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="a">(a) </num><content style="-uslm-dtd:text">No State, or political subdivision thereof, shall have power to assess, after the date of the enactment of this Act, any net income tax which was imposed by such State or political subdivision, as the case may be, for any taxable year ending on or before such date, on the income derived within such State by any person from interstate commerce, if the imposition of such tax for a taxable year ending after such date is prohibited by section 101.</content></subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/86/272/tI/s102/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><chapeau style="-uslm-dtd:text">The provisions of subsection (a) shall not be construed—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s102/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">to invalidate the collection, on or before the date of the enactment of this Act, of any net income tax imposed for a taxable year ending on or before such date, or</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/86/272/tI/s102/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">to prohibit the collection, after the date of the enactment of this Act, of any net income tax which was assessed on or before such date for a taxable year ending on or before such date.</content>
</paragraph>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/86/272/tI/s103" styleType="traditional">
<num style="-uslm-dtd:enum" value="103">Sec. 103. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s383">15 U.S.C. 383</ref><b>]</b> </editorialNote><content style="-uslm-dtd:text">For purposes of this title, the term “<quotedText style="-uslm-dtd:quote">net income tax</quotedText>” means any tax imposed on, or measured by, net income.</content>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/86/272/tI/s104" styleType="traditional">
<num style="-uslm-dtd:enum" value="104">Sec. 104. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s384">15 U.S.C. 384</ref><b>]</b> </editorialNote><content style="-uslm-dtd:text">If any provision of this title or the application of such provision to any person or circumstance is held invalid, the remainder of this title or the application of such provision to persons or circumstances other than those to which it is held invalid, shall not be affected thereby.</content>
</section>
<num style="-uslm-dtd:enum" value="II">TITLE II—</num><heading style="-uslm-dtd:header" class="bold">DISCRIMINATORY TAXES </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/86/272/tII/s201" styleType="traditional">
<num style="-uslm-dtd:enum" value="201">Sec. 201. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s381">15 U.S.C. 381 note</ref><b>]</b> </editorialNote><content style="-uslm-dtd:text">No State, or political subdivision thereof, may impose or assess a tax on or with respect to the generation or transmission of electricity which discriminates against out-of-State manufacturers, producers, wholesalers, retailers, or consumers of that electricity. For purposes of this section a tax is discriminatory if it results, either directly or indirectly, in a greater tax burden on electricity which is generated and transmitted in interstate commerce than on electricity which is generated and transmitted in intrastate commerce.</content>
</section>