Sec. 2. Modernization of Public Law 86–272
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Public Law 86–272 Section 101 of the Act entitled An Act relating 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 , approved September 14, 1959 ( 15 U.S.C. 381 et seq.), is amended— in subsection (a), by striking either, or both, and inserting any one or more ; in subsection (a)(1), by striking by such person and all that follows and inserting (which are sent outside the State for approval or rejection) or customers by such person, or the representative of such person, in such State for sales or transactions, which are— in the case of tangible personal property, filled by shipment or delivery from a point outside the State; and in the case of all other forms of property, services, and other transactions, fulfilled or distributed from a point outside the State; ; in subsection (a)(2), by striking the period at the end and inserting a semicolon; in subsection (a), by adding at the end the following: the furnishing of information to customers or affiliates in such State, or the coverage of events or other gathering of information in such State by such person, or his representative, which information is used or disseminated from a point outside the State; those business activities directly related to such person’s potential or actual purchase of goods or services within the State if the final decision to purchase is made outside the State; and by reason of sales or transactions of a digital good or a digital service. ; by striking subsection
(c)and inserting the following: 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 or transactions in such State, the solicitation of orders for sales or transactions in such State, the furnishing of information to customers or affiliates in such State, or the coverage of events or other gathering of information in such State, on behalf of such person by one or more independent contractors; 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 are limited to making sales or fulfilling transactions, soliciting orders for sales or transactions, the furnishing of information to customers or affiliates, or the coverage of events or other gathering of information; or by reason of the furnishing of information to an independent contractor by such person ancillary to the solicitation of orders or transactions by the independent contractor on behalf of such person. ; and in subsection (d)(1)— by inserting or fulfilling transactions after selling ; and by striking the sale of, tangible personal property and inserting a sale or transaction, furnishing information, or covering events, or otherwise gathering information . Title I of the Act entitled An Act relating 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 , approved September 14, 1959 ( 15 U.S.C. 381 et seq.), is amended by adding at the end the following: For taxable periods beginning on or after January 1, 2019, the prohibitions of section 101 that apply with respect to net income taxes shall also apply with respect to each other business activity tax, as defined in section 5(a)(2) of the Business Activity Tax Simplification Act of 2019. A State or political subdivision thereof may not assess or collect any tax which by reason of this section the State or political subdivision may not impose. For purposes of this title— the term digital good means any software or other good that is delivered or transferred electronically, including sounds, images, data, facts, or combinations thereof, maintained in digital format, where such software or other good is the true object of the transaction, rather than the activity or service performed to create such software or other good, that results in the delivery to the customer of a complete copy of such software or other good, with the right to use permanently or for a specified period, and includes as an incidental component charges for the delivery or transfer of such software or other good; and the term digital service means any service that is provided electronically, including but not limited to audio services, data processing, cloud computing, the provision of remote access to or use of a digital good, and includes as an incidental component charges for the electronic provision of the digital service to the customer. .
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- Pub. L. 86-272
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