Q&A with the Pennsylvania Department of Revenue

Q:

For CNIT and PIT purposes, does P.L. 86-272 apply to sales in international commerce? For example, a non-U.S. corporation makes sales into Pennsylvania. The activities of the non-U.S. corporation do not exceed “solicitation.” Would the activities of the non-U.S. company be protected under P.L.86-272? 

A:

PIT- While P.L. 86-282 is a Federal, not state, law (it is codified at 15 U.S.C. § 381, et seq.), the Department believes that, for PIT purposes, P.L. 86-272 would apply to a company making sales of tangible personal property into Pennsylvania if its only activity in Pennsylvania is solicitation.

Protection would apply to a nonresident partner/shareholder. A resident partner/shareholder is taxed on income everywhere and is not protected under P.L. 86-272. However, CNIT - P.L. 86-272 by its terms only applies to interstate commerce and does not apply to foreign commerce. If this question concerns a specific taxpayer, consideration should be given to disclosing the identity of the taxpayer and all relevant facts to the Department and requesting a ruling.