Public Law 86-272 protects a taxpayer from which of the following taxes?
A)Texas Margin Tax (a tax with net income, gross receipts, and capital worth components).
B)Washington Business & Occupation Tax (a gross receipts tax).
C)Ohio Commercial Activity Tax (an excise tax with a gross receipts base).
D)California Franchise Tax (a net income tax).

Question

Quizplus · Accepted Answer

Public Law 86-272 is a federal law that protects taxpayers from state taxes on income generated from interstate commerce, as long as the taxpayer's activities in the state are limited to solicitation of sales and not other activities such as delivering goods or providing services. Therefore, the California Franchise Tax, which is a net income tax, would be the only tax on this list that a taxpayer would be protected from under Public Law 86-272.

Public Law 86-272 Protects a Taxpayer from Which of the Following