A Republican bill with no cosponsors
Last activity — Referred to the House Committee on the Judiciary.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- 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
- Scored +8
Would business owners be better off under this?
Business owners, especially those in digital services or interstate commerce, benefit from reduced state tax liabilities.
- Scored +7
Does this make it easier to do business across state lines?
The bill aims to simplify and regulate state taxation of interstate commerce, reducing barriers to trade.
- Scored +6
Does this make it easier to run a small business?
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
- Scored -7
Does this leave more decisions to the states?
The bill restricts the ability of states to impose and collect certain business activity taxes.
- Scored -6
Does this put more rules on large technology companies?
The bill specifically protects digital goods and services from certain state taxes, reducing regulatory/tax pressure on tech companies.
- Scored -5
Does this raise the taxes companies pay?
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. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would business owners be better off under this? — Business owners, especially those in digital services or interstate commerce, benefit from reduced state tax liabilities. Would billionaires be better off under this? — Owners of large corporations and digital platforms benefit from the restriction on state-level business activity taxes.
- Economy And Finance
- Does this make it easier to run a small business? — Provides protections for small businesses and independent contractors from being taxed in states where they lack a significant physical presence. Does this cut taxes for small businesses? — Small businesses operating across state lines may see a reduction in state tax burdens due to the physical presence requirement. Is this likely to grow the economy? — Simplifying state tax compliance for digital and interstate commerce is likely to stimulate economic activity. Is this likely to create jobs? — Lowering tax burdens on interstate commerce and digital services may encourage business expansion and hiring. Does this raise the taxes companies pay? — The bill reduces the ability of states to collect net income and business activity taxes from corporations without a physical presence.
- Education And Technology
- Does this put more rules on large technology companies? — The bill specifically protects digital goods and services from certain state taxes, reducing regulatory/tax pressure on tech companies. Does this put more money into public schools? — Reduced state tax revenue from business activity taxes could potentially lead to lower funding for public services, including schools.
- Governance And Ideology
- Does this make it easier to do business across state lines? — The bill aims to simplify and regulate state taxation of interstate commerce, reducing barriers to trade. Does this give the federal government more power? — The bill asserts federal authority to limit the taxing powers of individual states. Does this leave more decisions to the states? — The bill restricts the ability of states to impose and collect certain business activity taxes.
- National Security And Foreign Policy
- Does this make trade with other countries easier? — By limiting state tax reach on interstate commerce, it may facilitate smoother trade between jurisdictions.
- 6/10/2026
- Referred to the House Committee on the Judiciary.
- Introduced in House