Federal Limitations on State Taxation
Author: Brandon J Bourg, Hodgson Russ LLP, Joseph T Tantillo, K. Craig Reilly
| CPE Credit: |
2 hours for CPAs |
This course, led by state tax attorneys from Hodgson Russ LLP, will explore the recent trends and developments in the interpretation and application of federal laws that impose limits on state taxation. These federal limitations, which include Public Law 86-272, the Internet Tax Freedom Act (ITFA), and Public Law 104-95, are currently being tested and challenged by various state revenue agencies.
In today’s increasingly digital and national economy, it is therefore essential for all multistate taxpayers to know how to rely on these protections and how to resist state challenges where appropriate. This course will focus on the various state efforts to shrink federal protections and offer practical solutions for how multistate taxpayers should interpret and apply the protections as they exist today.
Publication Date: March 2026
Topics Covered
- Historical context of Public Law 86-272
- Recent state interpretations narrowing the Public Law 86-272’s scope and application
- Taxpayer-initiated litigation challenging aggressive state interpretations of the federal law
- Impact of e-commerce and digital transactions on nexus determinations
- Strategies for businesses navigating the changing Public Law 86-272 landscape
- Historical context and impact of the Internet Tax Freedom Act (ITFA) on state taxation
- State’s efforts to erode IFTA protections
- IFTA prohibition of discriminatory e-Commerce taxes
- Federal protections afforded to qualified retirement plans
Learning Objectives
- Explain the original intent and limitations of Public Law 86-272
- Identify recent state actions that have narrowed the law’s protections
- Develop strategies to manage tax risk in light of shrinking Public Law 86-272 protections
- Explain the scope of federal protections against state taxation afforded to qualified retirement plans
- Recognize current issues involving the Internet Tax Freedom Act (IFTA)
- Determine future trends in state taxation of out-of-state business
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
