Bill · H.R. 9244· House(119-HR-9244)
Business Activity Tax Simplification Act of 2026
- Introduced
- 6/10/2026
- Last activity
- 6/10/2026 — Referred to the House Committee on the Judiciary.
- Sponsored by
- Pat Harrigan
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The Business Activity Tax Simplification Act of 2026 aims to regulate how states tax interstate commerce. It updates Public Law 86-272 to include protections for digital goods and services, as well as activities like furnishing information and covering events. The bill prevents states from collecting net income or other business activity taxes from persons who do not have a physical presence in the state. It defines specific requirements for what constitutes a physical presence and provides exceptions for local residents and domestic businesses. Additionally, it establishes rules for calculating taxes for group returns.
Yes· 3 of 9
Would business owners be better off under this?+8
Business owners, especially those in digital services or interstate commerce, benefit from reduced state tax liabilities.
Does this make it easier to do business across state lines?+7
The bill aims to simplify and regulate state taxation of interstate commerce, reducing barriers to trade.
Does this make it easier to run a small business?+6
Provides protections for small businesses and independent contractors from being taxed in states where they lack a significant physical presence.
The opposite· 3 of 4
Does this leave more decisions to the states?-7
The bill restricts the ability of states to impose and collect certain business activity taxes.
Does this put more rules on large technology companies?-6
The bill specifically protects digital goods and services from certain state taxes, reducing regulatory/tax pressure on tech companies.
Does this raise the taxes companies pay?-5
The bill reduces the ability of states to collect net income and business activity taxes from corporations without a physical presence.
Who it would affect, and how
Potential Positive Impacts for People
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Protection for Digital Commerce: The bill prevents states from imposing taxes on the sale or transaction of digital goods and services, which may benefit those providing or using electronic software and services (Sec. 2(a)(4)).
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Limits on State Tax Reach: States cannot collect net income or other business activity taxes from persons unless they have a physical presence in the state, reducing the tax burden on those operating across state lines (Sec. 3(a)).
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Clear Physical Presence Standards: The bill defines "physical presence" strictly, excluding presence in a state for less than 15 days or limited/transient business activity, which protects occasional travelers or short-term business visitors from being taxed (Sec. 3(b)(2)).
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Independent Contractor Protections: A person is not considered to have business activities in a state simply because they use independent contractors to solicit orders, furnish information, or maintain an office (Sec. 2(c)).
Potential Negative Impacts for People
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Reduced State Revenue: By prohibiting states and their political subdivisions from assessing or collecting certain business activity taxes, states may experience a loss in tax revenue that could otherwise fund public services (Sec. 2(b)).
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Complexity for Group Returns: The bill requires a specific methodology for computing taxes for affiliated persons, which may require businesses to adjust their accounting processes to ensure the numerator and denominator of apportionment formulas are correct (Sec. 4).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Business Owners+8Good For Billionaires+5
- Economy And Finance
- Improves Small Business Support+6Reduces Small Business Taxes+5Improves Economic Growth+4Increases Job Creation+2Increases Corporate Taxes-5
- Education And Technology
- Increases Big Tech Regulation-6Increases Public School Funding-3
- Governance And Ideology
- Improves Interstate Commerce+7Increases Federal Power+5Increase States Rights-7
- National Security And Foreign Policy
- Improves International Trade+3
- 6/10/2026
- Referred to the House Committee on the Judiciary.
- Introduced in House