Dear Chairman Arrington and Ranking Member Boyle,
On behalf of the National Conference of State Legislatures, the bipartisan organization representing the legislatures of our nation's states, territories, commonwealths and Washington, D.C., we urges you to oppose the inclusion of the Interstate Commerce Simplification Act of 2025 and any other similar changes to P.L. 86-272 in a final budget reconciliation measure. The act has adverse fiscal ramifications on states, and its inclusion in a reconciliation bill has no direct federal fiscal impacts, as stipulated by the Congressional Budget Act.
The Interstate Commerce Simplification Act seeks to define the term "solicitation of orders" by expanding exempted activity under the law, which would restrict a state's tax base and ability to collect income tax. States have the inherent right to maintain fiscal sovereignty and have historically been free from federal intervention. The Interstate Commerce and Simplification Act is an incursion on a state's taxing power as upheld in challenges to P.L. 86-272 under the U.S. Supreme Court case Wrigley and the Oregon State Supreme Court decision in Sante Fe Natural Tobacco Company v. Department of Revenue, which the U.S. Supreme Court let stand.
We kindly ask that Congress strike the Interstate Commerce Simplification Act of 2025 and any other similar changes to P.L. 86-272 from consideration under reconciliation. NCSL looks forward to working with you on this issue, and we welcome the opportunity for further discussion. If you have any questions, please contact Brian Wanko, Senior Legislative Director for Budgets and Revenue, State-Federal Affairs at [email protected].
Sincerely,
Representative April Berg
Member, Washington House of Representatives and Co-Chair
NCSL Budgets and Revenue Committee
Senator Tim Reed
Member, South Dakota Senate and Co-Chair
NCSL Budgets and Revenue Committee
Senator Dina Neal
Member, Nevada Senate and Co-Chair
NCSL State and Local Taxation Task Force
Rep. Carlton Wing
Member, Arkansas House of Representatives and Co-Chair
NCSL State and Local Taxation Task Force
Cc:
Chairwoman Virginia Foxx, U.S. House Committee on Rules
Ranking Member Jim McGovern, U.S. House Committee on Rules
Chairman Lindsey Graham, U.S. Senate Committee on the Budget
Ranking Member Jeff Merkley, U.S. Senate Committee on the Budget