The amendments provide a framework in determining whether P.L. 86-272 protects non-solicited business activities performed over the internet. For example, the use of “static text or photos” on a seller’s website or “cookies” placed on customer’s computers or electronic devices that are “only used for purposes entirely ancillary to the solicitation of orders for tangible personal property” such as remembering items in a user’s shopping cart or storing personal information are still considered protected activities under the new guidance.
However, the use of these “cookies” to adjust production schedules and inventory, develop new products, or identify new items to offer for sale are not considered ancillary to solicitation and are not protected under P.L. 86-272. The adoption of the proposed revised statement could result in significant income tax liabilities for many remote businesses, as many of these businesses use a website or phone application to interact with their customers.