---
kind: "section"
citation: "15 U.S.C. § 381"
title: "15"
title_heading: "Commerce and Trade"
number: "381"
heading: "Imposition of net income tax"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/381"
units:
  - "Chapter 10B — State Taxation of Income from Interstate Commerce"
  - "Subchapter I — Net Income Taxes"
---

# §381. Imposition of net income tax

- (a) **Minimum standards—** No [State](/usc/15/15g.md?p=2), or political subdivision thereof, shall have power to impose, for any taxable year ending after September 14, 1959, a net income tax on the income derived within such [State](/usc/15/15g.md?p=2) by any [person](/usc/15/7a.md?p=6) from interstate commerce if the only business activities within such [State](/usc/15/15g.md?p=2) by or on behalf of such [person](/usc/15/7a.md?p=6) during such taxable year are either, or both, of the following:
  - (1) the solicitation of orders by such [person](/usc/15/7a.md?p=6), or his representative, in such [State](/usc/15/15g.md?p=2) for sales of tangible personal property, which orders are sent outside the [State](/usc/15/15g.md?p=2) for approval or rejection, and, if approved, are filled by shipment or delivery from a point outside the [State](/usc/15/15g.md?p=2); and
  - (2) the solicitation of orders by such [person](/usc/15/7a.md?p=6), or his representative, in such [State](/usc/15/15g.md?p=2) in the name of or for the benefit of a prospective customer of such [person](/usc/15/7a.md?p=6), if orders by such customer to such [person](/usc/15/7a.md?p=6) to enable such customer to fill orders resulting from such solicitation are orders described in [paragraph (1)](#a-1).
- (b) **Domestic corporations; persons domiciled in or residents of a State—** The provisions of [subsection (a)](#a) shall not apply to the imposition of a net income tax by any [State](/usc/15/15g.md?p=2), or political subdivision thereof, with respect to—
  - (1) any corporation which is incorporated under the laws of such [State](/usc/15/15g.md?p=2); or
  - (2) any individual who, under the laws of such [State](/usc/15/15g.md?p=2), is domiciled in, or a resident of, such [State](/usc/15/15g.md?p=2).
- (c) **Sales or solicitation of orders for sales by independent contractors—** For purposes of [subsection (a)](#a), a [person](/usc/15/7a.md?p=6) shall not be considered to have engaged in business activities within a [State](/usc/15/15g.md?p=2) during any taxable year merely by reason of sales in such [State](/usc/15/15g.md?p=2), or the solicitation of orders for sales in such [State](/usc/15/15g.md?p=2), of tangible personal property on behalf of such [person](/usc/15/7a.md?p=6) by one or more independent contractors, or by reason of the maintenance, of an office in such [State](/usc/15/15g.md?p=2) by one or more independent contractors whose activities on behalf of such [person](/usc/15/7a.md?p=6) in such [State](/usc/15/15g.md?p=2) consist solely of making sales, or soliciting orders for sales, or tangible personal property.
- (d) **Definitions—** For purposes of this section—
  - (1) the term “independent contractor” means a commission agent, broker, or other independent contractor who is engaged in selling, or soliciting orders for the sale of, tangible personal property for more than one principal and who holds himself out as such in the regular course of his business activities; and
  - (2) the term “representative” does not include an independent contractor.

## Source credit

(Pub. L. 86–272, title I, § 101, Sept. 14, 1959, 73 Stat. 555.)

## Notes

### Statutory Notes and Related Subsidiaries

### Study and Report by Congressional Committees of State Taxation From Interstate Commerce

Title II of Pub. L. 86–272, as amended by Pub. L. 87–17, Apr. 7, 1961, 75 Stat. 41; Pub. L. 87–435, Apr. 21, 1962, 76 Stat. 55; Pub. L. 88–42, June 21, 1963, 77 Stat. 67; Pub. L. 88–286, Mar. 18, 1964, 78 Stat. 166, and repealed by Pub. L. 94–455, title XXI, § 2121(a), Oct. 4, 1976, 90 Stat. 1914, provided for a study by the Committee on the Judiciary of the House of Representatives and the Committee on Finance of the United States Senate, acting separately or jointly, or any duly authorized subcommittee thereof, of all matters pertaining to the taxation of interstate commerce by the States, territories, and possessions of the United States, the District of Columbia, and the Commonwealth of Puerto Rico, or any political or taxing subdivision of the foregoing, and for a report together with their proposals for legislation on or before June 30, 1965.