of the State, or domiciled in the State, in which 
the tax is imposed; or 
(B) an individual who is domiciled in the 
State in which the tax is imposed. 
(2) TAXATION OF PARTNERS AND SIMILAR PER-
SONS.—If a taxing authority is not prohibited by 
this section from taxing an entity that is a partner-
ship, an S corporation (as defined in section 1361 
of the Internal Revenue Code of 1986), a limited li-
ability company, a trust, or an estate, or another 
similar entity, that taxing authority is also not pro-
hibited by this section from taxing the owners or 
beneficiaries of the entity, if State law imposes the 
tax not on the entity itself but on the entity’s owners 
or beneficiaries, whether or not they are in the 
State, with respect to their ownership interest in the 
entity. 
(3) CERTAIN ACTIVITIES.—With respect to the 
following, subsection (b) shall be read by sub-
stituting ‘‘one day’’ for ‘‘more than 21 days’’: 
(A) The sale within a State of tangible 
personal property, where delivery of the prop-
erty originates and is completed within the 
State.
(B) The performance of services that phys-
ically affect real property within a State. 
(4) EXCEPTION
RELATING
TO
CERTAIN
PER-
FORMANCES AND SPORTING EVENTS.—With respect 
to the taxation of the following, subsection (b) shall 
be read by substituting ‘‘one day’’ for ‘‘more than 
21 days’’: 
(A) A live performance in a State, before 
a live audience of more than 100 individuals. 
(B) A live sporting event in a State before 
more than 100 spectators present at the event. 
(e) RULE OF CONSTRUCTION.—This section shall not 
be construed to modify, affect, or supersede the operation 
of title I of the Act entitled ‘‘An Act relating to the power 
of the States to impose net income taxes on income derived 
from interstate commerce, and authorizing studies by con-
gressional committees of matters pertaining thereto’’, ap-
proved September 14, 1959 (15 U.S.C. 381 et seq.). 
SEC. 4. DEFINITIONS. 
The following definitions apply in this Act: 
(1) NET INCOME TAX.—The term ‘‘net income 
tax’’ has the meaning given that term for the pur-
poses of the Act entitled ‘‘An Act relating to the 
power of the States to impose net income taxes on 
income derived from interstate commerce, and au-
thorizing studies by congressional committees of 
matters pertaining thereto’’, approved September 
14, 1959 (15 U.S.C. 381 et seq.). 
(2) OTHER BUSINESS ACTIVITY TAX.—
(A) The term ‘‘other business activity tax’’ 
means—
(i) a tax imposed on or measured by 
gross receipts, gross income, or gross prof-
its; 
(ii) a business license tax; 
(iii) a business and occupation tax; 
(iv) a franchise tax; 
(v) a single business tax or a capital 
stock tax; or 
(vi) any other tax imposed by a State 
on a business for the right to do business 
in the State or measured by the amount 
of, or economic results of, business or re-
lated activity conducted in the State. 
(B) The term ‘‘other business activity tax’’ 
does not include a transaction tax. 
(3) STATE.—The term ‘‘State’’ means any of 
the several States, the District of Columbia, or any 
territory or possession of the United States, or any 
political subdivision of any of the foregoing.
SEC. 5. EFFECTIVE DATE. 
Except as provided otherwise in this Act, this Act ap-
plies with respect to taxable periods beginning on and 
after the first day of the first year that begins after the 
date of enactment of this Act.
Æ