PL 86-272 is a federal law enacted in 1959 that prohibits states from imposing a net income tax on income derived within the state by an interstate business if the business’ in-state business activities are limited to the solicitation of orders for sales of tangible personal property. Since 2018, when the U.S. Supreme Court overruled long standing precedent in South Dakota v. Wayfair that an interstate business can have taxable nexus without physical presence, PL 86-272 has been aggressively under attack by states as one of the only remaining state tax imposition protections for interstate businesses.

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