The Multistate Tax Commission (MTC) is updating its Public Law 86-272 guidance, "Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States under Public Law 86-272," to address internet activities. This guidance was last updated in 2001. The latest draft guidance, dated October 15, 2019, provides examples of when the use of an "interactive" website will defeat P.L. 86-272 immunity, even if the company has no other contact with the customer's state. Such examples include:
- providing post-sale assistance to customers via either electronic chat or email accessed through a website link;
- soliciting and receiving online applications for branded credit cards;
- inviting viewers to apply for employment;
- contracting with a marketplace facilitator, whose marketplace offers for sale the company's products via a website and maintains the company's inventory;
- inserting internet "cookies" into the computers or other electronic devices of customers; or
- remotely fixing products via the internet and WiFi.
Having one of the listed internet activities—by itself—would cause a company that has limited its in-state activities to solicitation of sales to lose its P.L. 86-272 immunity according to the draft guidance. In effect, the MTC's draft guidance would eviscerate P.L. 86-272 protection given today's digital economy.
The October 15, 2019, draft "Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States under Public Law 86-272" can be accessed here. More information can be found on the MTC's web page.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
