Interstate Commerce Bill Broadens Tax Definition: What 'Solicitation of Orders' Means for Your Business

The Interstate Commerce Simplification Act of 2025 sounds like something only an accountant could love, but this particular section (SEC. 2) is a big deal for anyone running a business that sells across state lines. It’s making a technical, but massive, change to the definition of "solicitation of orders" under Public Law 86-272—a law that decides when a state can tax an out-of-state company.

The Fine Print That Changes Everything

Previously, PL 86-272 protected companies from state income tax if their only activity in that state was the mere "solicitation of orders." This bill updates that definition to be much broader. The new rule states that if a business activity helps get orders placed, it counts as "solicitation of orders," even if that activity serves other purposes for the business. They are essentially saying that if an activity facilitates the order, it’s covered, regardless of any other function it might serve (Sec. 2).

Why This Matters for Your Bottom Line

Think of the small business owner in Ohio who sells specialty tools online to customers in Texas. Under the old law, if they just sent a sales rep to Texas to ask for orders, they likely wouldn't owe Texas income tax. But what about modern business? This new, broader definition is designed to sweep up activities that help close the deal but go beyond simple persuasion. For example, if that Ohio company now sends a technician to Texas to train the customer on how to use the tool before the order is placed, or if their website’s interactive chat feature offers technical support that facilitates the sale—these activities could now be deemed “solicitation.”

The Real-World Tax Trap

This broad phrasing creates a lot of ambiguity. The bill aims for simplification, but the phrase “helps get orders placed” is subjective. What one state tax auditor considers a helpful activity, another might see as establishing a full tax presence (or “nexus”). For businesses that rely on digital tools and supportive services—like providing online design consultations or sending customer success teams to check in—these activities, which were once considered safe, might now trigger an income tax obligation in every state where they operate. The risk is that states will interpret this new, vague language aggressively to claim more tax revenue, forcing businesses to track and file taxes in potentially 50 different jurisdictions, significantly increasing compliance costs and administrative headaches.