Minnesota Expanding Corporate Income Tax to Out-of-State Sellers

Minnesota is poised to become the latest state to extend the reach of its corporate income tax under a proposed rule that would shave back protections allowed under a federal law shielding out-of-state retailers from taxation.

The Minnesota Department of Revenue has circulated a draft revenue notice that reinterprets the protections available under the federal Interstate Income Act (Public Law 86-272), which prohibits states from imposing income taxes on out-of-state businesses if their only activity in the state is soliciting sales of tangible personal property. The department modified its views of the 64-year-old law in the context of ...