TAXLITIGATOR – Tax Controversy (Civil & Criminal) Report

In a 1959 opinion, the U.S. Supreme Court held that an out-of-state business whose sole contact with a state was to have “drummers” go into the state to solicit orders could be taxed by that state on income from those sales. In response, Congress enacted Pub. Law 86-272 to limit the power of states to impose a net income tax on out-of-state sellers who have limited business activities within the state. To fall within P.L. 86-272’s protection, an out-of-state seller’s in-state business activity must generally be limited to the “solicitation of orders” for the sale of tangible goods, provided that the orders are sent to a location outside the taxing state for approval and the orders are filled by shipment or delivery from a location outside the taxing state. Pub. Law 86-272 is codified at 15 U.S.C. §§ 381-384.

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Robert Horwitz a Principal of Hochman Salkin Toscher Perez P.C. has over 40 years of experience as a tax attorney specializing in the representation of clients in civil and criminal tax cases, including civil audits and appeals, tax collection matters, criminal investigations, administrative hearings and in civil and criminal trials and appeals in federal and state courts. He has served as a member of the Executive Committee of the Taxation Section of the State Bar of California and was Chair of the Taxation Section for 2015-2016 year. He was previously Chair of the Tax Procedure and Litigation Committee of the State Bar Taxation Section. He is the 2022 recipient of the California Lawyers Association Joanne M. Garvey Award for lifetime achievement and outstanding contributions to the field of tax law.

For more information, please contact Robert S. Horwitz at horwitz@taxlitigator.com