Waukesha Times

WASHINGTON, DC – Congressman Scott Fitzgerald (WI-05) has introduced the Interstate Commerce Simplification Act to prevent states from subjecting businesses to double income taxation. The bill aims to shield businesses that sell goods or services into a state without a physical presence from being taxed by that state.

"Without clear and concise guidance, overzealous states can pursue tax revenue from business owners simply for having a website. This ultimately leaves business owners with a mess of compliance burdens and vulnerable to double taxation. I’m proud to introduce the Interstate Commerce Simplification Act to promote consistent and uniform compliance that takes the burden off businesses and keeps our economy open for business,” said Rep. Fitzgerald.

The bill proposes defining the term “solicitation of orders” as any business activity that facilitates order solicitation, even if it also serves other valuable business functions. This clarification aims to prevent states from imposing income tax on businesses solely based on online presence or solicitation activities.

Traditionally, income tax nexus has been determined by physical presence or significant economic activities beyond order solicitation. Current laws protect businesses from income taxation in states where their only activities are order solicitation for goods delivered from outside the state. However, the rise of online retail has raised concerns about potential multiple taxation scenarios for businesses.

Under the Interstate Commerce Simplification Act, Rep. Fitzgerald seeks to establish consistent and uniform compliance standards to relieve businesses of unnecessary tax burdens and protect them from double taxation. The bill intends to maintain an open and business-friendly economic environment while ensuring fair taxation practices for businesses operating across state lines.