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NY Draft Rule Mirrors MTC Stance on Online Biz Tax Buffer

Law360 Tax Authority

Certain internet activities would not qualify for federal protections that insulate businesses from tax on net income when soliciting tangible personal property orders is their only connection to a state under guidance proposed by New York on Friday.

The guidance on the federal protections afforded by the Interstate Income Act of 1959, commonly known as P.L. 86-272, generally follow an updated statement from the Multistate Tax Commission on how states could apply the law in the internet age. New York is the second state, after California, to issue guidance indicating that it intends to conform to the MTC statement.


Mitchell Newmark, tax partner at Blank Rome LLP, said he had not yet read the New York proposals but is versed in the language of the MTC updated statement. He said he finds it to be an overreach. He said Congress should authorize another "Willis Commission," referring to the Special Subcommittee on the Taxation of Interstate Commerce that operated in the mid-1960s.

"I am disappointed in the MTC and the MTC model," Newmark said.

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"NY Draft Rule Mirrors MTC Stance on Online Biz Tax Buffer," by  Maria Koklanaris was published in Law360 Tax Authority on April 29, 2022.