The 50th Anniversary of
Public Law 86-272 - September 14, 2009 -
Will it still be in its historic form or an updated one?

In addition to highlighting the upcoming epic milestone of this temporary/stopgap legislation, this site provides background on this law and links to information about current efforts to update and reform this rule dealing with state taxation of multistate businesses. Information on the UDITPA rewrite is also included since the drafting committee may look into economic nexus.

Is it too early to note this upcoming anniversary? Probably not. The issues surrounding updating and reforming this nexus provision are complex and have already been underway for the past several years. The discussions and debate are likely to last into the 111th Congress and presidency. Perhaps highlighting the 50th anniversary will provide a stimulus for ramping up efforts to resolve the current issues.

Opportunity for comment and debate

• See the blog post on this topic - please post a comment

P.L. 86-272 Links & History

• Text

• The 50th Anniversary of Public Law 86-272, AICPA Corporate Taxation Insider, by Annette Nellen (3/27/08)

Congressional Reform Proposals and Hearings

110th Congress

• S. 1726

  • Remarks of Senators Schumer and Crapo (6/28/07) - pages: 1  2  3

• H.R. 5267

  • Remarks of Congressman Boucher (2/7/08)

  • Hearing in House Judiciary Committee (6/24/08)

• House Small Business Committee hearing or 2/14/08 - Business Activity Taxes and their Impact on Small Businesses

  • press release

109th Congress

• S. 2721

• H.R. 1956

  • CBO cost estimate

• Senate Finance Committee hearing of 7/25/06 - How Much Should Borders Matter? Tax Jurisdiction in the New Economy

• Congressional Research Service report (RL32297) State Corporate Income Taxes: A Description and Analysis (6/30/06)
   

108th Congress

• H.R. 3220

  • Congressman Goodlatte's remarks on introduction of HR 3220

  • House Judiciary Committee hearing (5/13/04)  transcript

107th Congress

• H.R. 2526

• S. 664

106th Congress

• H.R. 4267

• S. 2401

Other Reform Proposals

• Multistate Tax Commission (MTC) Factor Presence Nexus Standard

• Information from the federal Advisory Commission on Electronic Commerce - final report (4/00) - see report pages 21-22

Commentary

Focus on Business Concerns

• Council on State Taxation (COST) policy statement on constitutional jurisdiction to impose business activity taxes

• COST-EY study on cost of physical presence standard

• COST response to 9/05 NGA report on costs of HR 1956

• ITAA support for HR 1956

• Tax Foundation Blog Posts 12/12/06     5/9/07

• Amicus briefs

  • COST - Lanco and FIA Card Services (formerly MBNA) cases (5/9/07)

  • COST - Capital One Bank v. Commissioner of Revenue (2/1/08)

  • Tax Foundation - FIA Card Services (MBNA)

Focus on State Government Concerns

• National Governor's Association (NGA)

  • Overview to concerns

  • Cost estimate report for HR 1956 (9/26/05)

  • Letter opposing S 2721 (6/1/06)

• National Conference of State Legislatures (NCSL)

  • Floor Alert opposing HR 1956 (7/24/06)

• Center on Budget and Policy Priorities (CBPP) - by Michael Mazerov

  • Proposed "Business Activity Tax Nexus" Legislation Would Seriously Undermine State Taxes on Corporate Profits and Harm the Economy (7/17/08)

  • Report on problems with S. 1726 and HR 5267 (6/08)

  • Counterarguments to those in favor of BAT nexus proposals (6/08)

  • "Claim That Proposed Federal "Business Activity Tax Nexus" Bill Would Have a Negligible Impact on State Revenue is False and Disingenuous," (12/22/05)

  • "Federal "Business Activity Tax Nexus" Legislation: Half of a Two-Pronged Strategy to Gut State Corporate Income Taxes," (11/30/05)

• California Budget Project (CBP)

  • Budget Brief (8/06)

General

• Not Flat - State Income Tax Nexus, AICPA Corporate Taxation Insider, by Annette Nellen, 6/26/08

Court Decisions

• Tax Commissioner of the State of West Virginia v. MBNA America Bank (S Ct. WV 2006)

• Northwestern Cement v. Minn., 358 US 450 (1959)

• Wisconsin v. J.C. Penney Co., 311 US 435 (1940)

Opportunity for comment and debate

• See the blog on this topic

UDITPA Rewrite

NCCUSL (National Conference of Commissioners on Uniform State Laws) drafted the Uniform Division of Income for Tax Purposes Act (UDITPA) in 1957. It was last amended in 1966. UDITPA provides rules on apportionment and allocation of multistate business income among states. A committee was appointed to review Section 17 of UDITPA which deals with sourcing of sales that are not of tangible property.

• NCCUSL information on the drafting committee to revise UDITPA, background, papers submitted to the committee

  • List of issues to consider (it includes the possibility of taking on the issue of economic nexus)

  • First meeting - May 30 & 31, 2008 in Chicago

• Background on NCCUSL, UDITPA and the issue raised for which rewriting was requested (FTB paper)

• Sutherland, Asbill & Brennan LLP article about a January 2008 MTC meeting, the NCCUSL rewrite process and MTC interests

• COST opposition to the project (1/10/08)

This page last revised on July 21, 2008.

Any views and opinions expressed in this page are strictly those of Professor Annette Nellen. The contents of this page have not been reviewed or approved by San José State University