At least a dozen states extend the income tax protections afforded under federal Pub. L. No. 86-272 to interstate sales of tangible personal property to corporations organized under the laws of another country, according to the preliminary results of the Bloomberg BNA 2013 Survey of State Tax Departments. However, a few of the states that have responded so far have indicated that they do not extend the protection to such entities.
Public L. No. 86-272 specifically applies, by its terms, to “interstate commerce” and does not directly apply to foreign commerce, according to the latest version of the Multistate Tax Commission’s Statement of Information Concerning Practices of the Multistate Tax Commission and Signatory States Under 86-272.
But section VII.A. of the statement explains that the states have the option to “apply the same standards set forth in the Public Law and in this Statement to business activities in foreign commerce to ensure that foreign and interstate commerce are treated on the same basis.” A state that treats both U.S. and foreign entities the same can avoid “the necessity of expensive and difficult efforts in the identification and application of the varied jurisdictional laws and rules existing in foreign countries,” the statement explains.
Among the states that have adopted this approach are Arizona and Florida. Declining to adopt this approach is New Jersey, which indicated on its questionnaire that it does not extend the protections afforded under Pub. L. No. 86-272 to an entity organized in a foreign country.
The full results to this and
other questions posed to the states will be included in the Bloomberg BNA 2013 Survey of State Tax Departments,
which will be published on April 26, 2013.
By Steven Roll
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)