Business Activity Tax Simplification Act of 2026

This bill would limit when states and local governments can charge income taxes and other business activity taxes on out-of-state businesses. A state could tax a business's interstate activities only if the business has a physical presence in the state, such as employees there or property owned or leased there, for at least 15 days in a tax year. It would expand an existing 1959 law so that soliciting sales of services and other property, gathering information, and selling digital goods or digital services would not by themselves allow a state to tax a business. The limits would not apply to businesses formed in the state or to individuals who live there, and states could still act against sham transactions and require combined reporting. The bill would apply to tax periods beginning on or after January 1, 2026.

Full text and official record on Congress.gov

Sponsors

• Pat Harrigan Republican sponsor
• 0 cosponsors