ASAP Cruises, Inc. v. Wisconsin Department of Revenue

In 1959, Congress enacted Public Law 86-272, 15 U.S.C. §§ 381-384 (hereinafter “Public Law 86-272”), in response to concerns raised by the business community regarding the level of activity required to be subject to a state’s corporate income tax. Public Law 86-272 helped alleviate these concerns and provides that a state may not impose tax where the only instate business activity of the taxpayer is the solicitation of sales. In the first case to interpret P.L. 86-272, this Court made clear that the federal law demarcated a “lower limit” of instate activity that is protected from state taxation. Heublein, Inc. v. South Carolina Tax Comm’n, 409 U.S. 275 (1972). This Court in Heublein emphasized that through the establishment of this lower limit Congress determined that a state’s interest in taxing in-state business activity below that limit was weaker than the national interest in promoting a national economy. The question presented is: Do the protections of P.L. 86-272 extend only to taxpayers that solicit sales of tangible personal property or—as held in Heublein— is the federal law concerned with the level of in-state business activity regardless of how the taxpayer earns its income?