Interstate Commerce Simplification Act of 2025

This bill updates a long-standing rule about when states can charge income taxes to out-of-state sellers. Today, if a company’s only activity in a state is asking for orders for physical goods, the state generally can’t tax that company’s income. The bill broadens what counts as “asking for orders.” It says activities that help with asking for orders count too, even if those activities also have their own business value. This would make it harder for states to tax some out-of-state sellers if their in-state work is mainly tied to getting orders, even when that work also serves other purposes .

Key points:

• Who is affected: Out-of-state companies that sell physical products and do some business activities inside a state; state tax departments.
• What changes: Expands the meaning of “soliciting orders” to include activities that help with sales requests, even if those activities also provide other business benefits; this keeps such companies protected from state income taxes if these are their only in-state activities .
• When: The text describes the change, but does not specify an effective date in the provided materials.