transactions, soliciting order for sales or trans-
actions, the furnishing of information to customers 
or affiliates, or the coverage of events or other gath-
ering of information; or 
‘‘(3) by reason of the furnishing of information 
to an independent contractor by such person ancil-
lary to the solicitation of orders or transactions by 
the independent contractor on behalf of such per-
son.’’; and 
(6) in subsection (d)(1)— 
(A) by inserting ‘‘or fulfilling trans-
actions,’’ after ‘‘selling’’; and 
(B) by striking ‘‘the sale of, tangible per-
sonal property’’ and inserting ‘‘a sale or trans-
action, furnishing information, or covering 
events, or otherwise gathering information’’. 
(b) APPLICATION OF PROHIBITIONS TO OTHER BUSI-
NESS ACTIVITY TAXES.—Title I of the Act entitled ‘‘An 
Act relating to the power of the States to impose net in-
come taxes on income derived from interstate commerce, 
and authorizing studies by congressional committees of 
matters pertaining thereto’’, approved September 14, 
1959, (15 U.S.C. 381 et seq.) is amended by adding at 
the end the following: 
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‘‘SEC. 105. For taxable periods beginning on or after 
January 1, 2009, the prohibitions of section 101 that 
apply with respect to net income taxes shall also apply 
with respect to each other business activity tax, as defined 
in section 3(g) of the Business Activity Tax Simplification 
Act of 2008. A State or political subdivision thereof may 
not assess or collect any tax which by reason of this sec-
tion the State or political subdivision may not impose.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to the imposition, as-
sessment, and collection of taxes for taxable periods begin-
ning on or after January 1, 2009. 
SEC. 3. MINIMUM JURISDICTIONAL STANDARD FOR STATE 
AND LOCAL NET INCOME TAXES AND OTHER 
BUSINESS ACTIVITY TAXES. 
(a) IN GENERAL.—No taxing authority of a State 
shall have power to impose, assess, or collect a net income 
tax or other business activity tax on any person relating 
to such person’s activities in interstate commerce unless 
such person has a physical presence in the State during 
the taxable period with respect to which the tax is im-
posed. 
(b) REQUIREMENTS FOR PHYSICAL PRESENCE.— 
(1) IN GENERAL.—For purposes of subsection 
(a), a person has a physical presence in a State only 
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if such person’s business activities in the State in-
clude any of the following during such person’s tax-
able year: 
(A) Being an individual physically in the 
State, or assigning one or more employees to be 
in the State. 
(B) Using the services of an agent (exclud-
ing an employee) to establish or maintain the 
market in the State, if such agent does not per-
form business services in the State for any 
other person during such taxable year. 
(C) The leasing or owning of tangible per-
sonal property or of real property in the State. 
(2) DE
MINIMIS
PHYSICAL
PRESENCE.—For 
purposes of this section, the term ‘‘physical pres-
ence’’ shall not include— 
(A) presence in a State for less than 15 
days in a taxable year (or a greater number of 
days if provided by State law); or 
(B) presence in a State to conduct limited 
or transient business activity. 
(c) TAXABLE PERIODS NOT CONSISTING
OF
A 
YEAR.—If the taxable period for which the tax is imposed 
is not a year, then any requirements expressed in days 
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for establishing physical presence under this Act shall be 
adjusted pro rata accordingly. 
(d) MINIMUM JURISDICTIONAL STANDARD.—This 
section provides for minimum jurisdictional standards and 
shall not be construed to modify, affect, or supersede the 
authority of a State or any other provision of Federal law 
allowing persons to conduct greater activities without the 
imposition of tax jurisdiction. 
(e) EXCEPTIONS.— 
(1) DOMESTIC BUSINESS ENTITIES AND INDI-
VIDUALS
DOMICILED
IN, OR
RESIDENTS
OF, THE 
STATE.—Subsection (a) does not apply with respect 
to— 
(A) a person (other than an individual) 
that is incorporated or formed under the laws 
of the State (or domiciled in the State) in which 
the tax is imposed; or 
(B) an individual who is domiciled in, or a 
resident of, the State in which the tax is im-
posed. 
(2) TAXATION OF PARTNERS AND SIMILAR PER-
SONS.—This section shall not be construed to modify 
or affect any State business activity tax liability of 
an owner or beneficiary of an entity that is a part-
nership, an S corporation (as defined in section 
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1361 of the Internal Revenue Code of 1986), a lim-
ited liability company (classified as a partnership for 
Federal income tax purposes), a trust, an estate, or 
any other similar entity, if the entity has a physical 
presence in the State in which the tax is imposed. 
(3) PRESERVATION OF AUTHORITY.—This sec-
tion shall not be construed to modify, affect, or su-
persede the authority of a State to bring an enforce-
ment action against a person or entity that may be 
engaged in an illegal activity, a sham transaction, or 
any perceived or actual abuse in its business activi-
ties if such enforcement action does not modify, af-
fect, or supersede the operation of any provision of 
this section or of any other Federal law. 
(f) 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.). 
(g) DEFINITIONS, ETC.—For purposes of this section: 
(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 
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