§ 381. — Imposition of net income tax.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC381]
TITLE 15--COMMERCE AND TRADE
CHAPTER 10B--STATE TAXATION OF INCOME FROM INTERSTATE COMMERCE
SUBCHAPTER I--NET INCOME TAXES
Sec. 381. Imposition of net income tax
(a) Minimum standards
No State, or political subdivision thereof, shall have power to
impose, for any taxable year ending after September 14, 1959, a net
income tax on the income derived within such State by any person from
interstate commerce if the only business activities within such State by
or on behalf of such person during such taxable year are either, or
both, of the following:
(1) the solicitation of orders by such person, or his
representative, in such State for sales of tangible personal
property, which orders are sent outside the State for approval or
rejection, and, if approved, are filled by shipment or delivery from
a point outside the State; and
(2) the solicitation of orders by such person, or his
representative, in such State in the name of or for the benefit of a
prospective customer of such person, if orders by such customer to
such person to enable such customer to fill orders resulting from
such solicitation are orders described in paragraph (1).
(b) Domestic corporations; persons domiciled in or residents of a State
The provisions of subsection (a) of this section shall not apply to
the imposition of a net income tax by any State, or political
subdivision thereof, with respect to--
(1) any corporation which is incorporated under the laws of such
State; or
(2) any individual who, under the laws of such State, is
domiciled in, or a resident of, such State.
(c) Sales or solicitation of orders for sales by independent contractors
For purposes of subsection (a) of this section, a person shall not
be considered to have engaged in business activities within a State
during any taxable year merely by reason of sales in such State, or the
solicitation of orders for sales in such State, of tangible personal
property on behalf of such person by one or more independent
contractors, or by reason of the maintenance, of an office in such State
by one or more independent contractors whose activities on behalf of
such person in such State consist solely of making sales, or soliciting
orders for sales, or tangible personal property.
(d) Definitions
For purposes of this section--
(1) the term ``independent contractor'' means a commission
agent, broker, or other independent contractor who is engaged in
selling, or soliciting orders for the sale of, tangible personal
property for more than one principal and who holds himself out as
such in the regular course of his business activities; and
(2) the term ``representative'' does not include an independent
contractor.
(Pub. L. 86-272, title I, Sec. 101, Sept. 14, 1959, 73 Stat. 555.)
Study and Report by Congressional Committees of State Taxation From
Interstate Commerce
Title II of Pub. L. 86-272, as amended by Pub. L. 87-17, Apr. 7,
1961, 75 Stat. 41; Pub. L. 87-435, Apr. 21, 1962, 76 Stat. 55; Pub. L.
88-42, June 21, 1963, 77 Stat. 67; Pub. L. 88-286, Mar. 18, 1964, 78
Stat. 166, and repealed by Pub. L. 94-455, title XXI, Sec. 2121(a), Oct.
4, 1976, 90 Stat. 1914, provided for a study by the Committee on the
Judiciary of the House of Representatives and the Committee on Finance
of the United States Senate, acting separately or jointly, or any duly
authorized subcommittee thereof, of all matters pertaining to the
taxation of interstate commerce by the States, territories, and
possessions of the United States, the District of Columbia, and the
Commonwealth of Puerto Rico, or any political or taxing subdivision of
the foregoing, and for a report together with their proposals for
legislation on or before June 30, 1965.
Section Referred to in Other Sections
This section is referred to in section 382 of this title.
