Public Law 86-272

Public Law 86-272 is a federal law that limits a state's ability to regulate or tax out-of-state businesses solely for selling or soliciting sales within that state. Specifically, it protects companies from state income or franchise taxes if their only activity in the state is soliciting orders (like advertising or sales calls), and these orders are then shipped outside the state for delivery. This law encourages interstate commerce by preventing states from imposing certain taxes on businesses that are only minimally involved in the state, as long as the activity is limited to solicitation.