Interstate Taxation Act

Interstate Taxation Act - Title I: Jurisdiction to Tax - Provides that no State or political subdivision thereof shall have power to: (1) impose a net income tax or a capital stock tax on a corporation other than an excluded corporation unless the corporation has a business location in the State or other political subdivision during the taxable year; (2) impose a gross receipts tax with respect to a sale of tangible personal property unless the seller has a business location in the State or political subdivision; or (3) require a person to collect and remit a sales or use tax with respect to an interstate sale of tangible personal property unless the person (A) has a business location in the State or political subdivision; or (B) regularly makes household deliveries in the State or political subdivision other than by common carrier or the United States Postal Service; or (C) regularly engages in the State or political subdivision in solicitation of orders for the sale of tangible personal property by means of salesmen, solicitors, or representatives. Provides that no State or political subdivision shall have power to require a seller without a business location in the State to collect or pay a sales or use tax when such seller has obtained in writing the buyer's registration number in accordance with this Act.

Provides that a State or political subdivision shall have the power to impose a corporate net income tax or capital stock tax, or a gross receipts tax with respect to a sale of tangible personal property or to require a seller to collect the sales or use tax with respect to an interstate sale of tangible personal property if it is not denied the power to do so under this Act or other Federal Statute.

Title II: Maximum Income or Capital Attributable to Taxing Jurisdiction - Prohibits a State or a political subdivision thereof from imposing on a corporation with a business location in more than one State, a net income tax (or capital stock tax) measured by an amount of net income (or capital) in excess of the amount determined by multiplying the corporation's base by an apportionment fraction which is the average of the corporation's property, payroll and sales factors for the State for the taxable year, plus, in the case of a tax measured by income, the amount of income allocable to the State for the taxable year.

Sets forth definitions of the three factors used in determining the corporation's apportionment fraction (1) the property factor, (2) the payroll factor and (3) the sales factor.

States that upon establishing that a taxpayer is engaged in a non-arm's-length transaction which causes a material distortion of income apportioned to the State, the State may require the apportioned income of such taxpayer to be determined by reference to the combined apportionable income of all parties to the non-arm's-length transactions. Provides that a non-arm's-length transaction is a transaction between two or more affiliated corporations consumated at a consideration in an amount which is more or less than the amount that would have been charged in an independent transaction between two or more unrelated corporations under similar circumstances considering all relevant facts. Provides that a taxpayer that is a member of an affiliated group shall be permitted to determine its income to be apportioned to any State by reference to the combined apportionable income if necessary to clearly reflect the taxpayer's income properly apportionable to the State.

Title III: Sales and Use Taxes - Authorizes a State or political subdivision thereof to impose a sales or use tax or require a seller to collect a sales or use tax with respect to an interstate sale of tangible personal property only if the destination of the sale is: (1) in that State, or (2) in a contiguous State for which the Tax is required to be collected under reciprocal collection agreements as authorized under this Act.

Provides that the amount of any use tax imposed with respect to tangible personal property shall be reduced by the amount of any sales or use tax previously incurred and paid by a person with respect to the property on account of liability to another State or political subdivision thereof.

Provides that no State or political subdivision thereof may impose a sales tax, use tax, or other nonrecurring tax measured by cost or value with respect to household goods, including motor vehicles, brought into the State by a person who establishes residence in that State if the goods were acquired and used by that person ninety days or more before use of the property in the State in which he establishes such residence.

Requires a person with a business location in a State and purchasing goods in interstate commerce to obtain a registration number from that State. Provides that persons without a business location in the State may rely upon such registration, as evidenced by receiving the registration number from the buyer, in writing as conclusive authority for not charging and collecting a sales or use tax.

Title IV: Jurisdiction of Federal Courts - Provides that the United States Court of Claims shall have jurisdiction to review de novo any issues relating to a dispute arising under this Act or under Public Law 86-272, as amended. Authorizes the Court of Claims to issue all necessary orders and process to bring before it the claims of all States to a share of a corporation's net income for the taxable year or years in issue, whether or not such States have previously been parties. Provides that the judgment of the Court of Claims shall be subject to review by the Supreme Court of the United States.

Title V: Definitions and Miscellaneous Provisions - Sets forth definitions of terms used in this Act. Provides that the fact that a tax to which this Act applies is imposed by a State of political subdivision thereof in the form of a franchise, privilege, or license tax shall not prevent the imposition of the tax on a person engaged exclusively in interstate commerce within the State. Provides that such a tax may be enforced against a person engaged exclusively in interstate commerce within the State solely as a revenue measure and not by ouster from the State or by criminal or other penalty for engaging in commerce within the State without permission from the State.

Provides that no provision of State law shall make any person liable for a greater amount of sales or use tax with respect to tangible personal property, or gross receipts tax with respect to tangible personal property, by virtue of the location of any occurrence in a State outside the taxing State, other than the amount of the tax for which such person would otherwise be liable if such occurrence were within the State.