Sponsors
The bill clarifies that dual-purpose in-state activities count as solicitation—strengthening protections for remote and small businesses and lowering litigation risk, while narrowing states' ability to tax those activities and potentially reducing state revenues and administrative certainty.
Small-business owners that rely on remote, incidental, or dual-purpose in-state activities gain clearer protection under Public Law 86–272 because 'solicitation of orders' is explicitly defined to include activities that also serve other business functions.
Taxpayers and state tax administrators benefit from clearer statutory language, which should reduce litigation and disputes over whether dual-purpose activities create a state tax nexus.
State governments may lose ability to tax some in-state business activity classified as solicitation, potentially reducing state tax revenue and funding for public services.
Some taxpayers could exploit the broader definition to contest state tax nexus, increasing disputes and administrative complexity for tax authorities and businesses.
Based on analysis of 2 sections of legislative text.
Introduced October 22, 2025 by Ron Johnson · Last progress October 22, 2025
Amends the definition of "solicitation of orders" in Public Law 86–272 to clarify that any business activity that facilitates soliciting orders counts as solicitation, even when that activity also serves other independent business purposes. The change is a targeted, text-only revision to statutory definition language and does not create new agencies, funds, deadlines, or procedural requirements. This is a narrow technical amendment affecting how courts and tax administrators may interpret the scope of solicitation protections under the existing law. It could change which business activities are treated as solicitation for state tax nexus purposes, with possible effects on businesses and state tax enforcement.