Does a website's interactivity strip a seller's P.L. 86-272 protection?

The statute, and the test the states say they are applying

The federal statute has not changed since 1959. A state may not impose a net income tax on income from interstate commerce if the person's only business activities within the state are the solicitation of orders for sales of tangible personal property, which orders are sent outside the state for approval or rejection and, if approved, are filled by shipment or delivery from a point outside the state, or the solicitation of such orders for the benefit of a prospective customer (15 U.S.C. section 381(a)). The protection does not extend to a corporation incorporated in the taxing state (section 381(b)), and solicitation through an independent contractor is not the seller's own business activity (section 381(c)). The statute speaks of business activities within the state, never of people, offices, or physical presence, and that wording is the opening every state instrument below walks through.

Wrigley fills in the word solicitation. Solicitation of orders covers the actual request for purchases and the activities entirely ancillary to it, meaning those that serve no independent business function apart from their connection to soliciting orders. An activity the company would have reason to perform anyway is not ancillary merely because the company assigns it to the people who solicit. The Court recognized a de minimis exception for unprotected activity that establishes only a trivial additional connection with the state, then applied it against the taxpayer. The library's article on sales representative activities walks that framework for people in the field; this article asks what happens when the same functions move onto a screen.

Two features of Wrigley carry the website question. The test is about function, not medium: a representative who resolves a complaint performs an independent business function, and the states' claim is that a chat window resolving the same complaint performs the same function. And the de minimis exception is qualitative as well as quantitative, which matters for a website function that runs for every customer by design.

The Multistate Tax Commission's 2021 statement

The Commission adopted the fourth revision of its Statement of Information Concerning Practices of Multistate Tax Commission and Supporting States Under Public Law 86-272 on August 4, 2021. The statement is an interpretive recommendation, not law in any state until that state adopts it, and it names no adopting states. It is the spine of the question because the California, New York, and New Jersey instruments track its text closely. Massachusetts amended its corporate nexus regulation in October 2025 to give the statement's data-gathering cookie as an example of website activity that may not be entirely ancillary to solicitation (830 CMR 63.39.1(4)(e)). Other states' positions are not analyzed here.

The revision added Article IV.C, activities conducted via the internet. The general rule: when a business interacts with a customer via the business's website or app, the business engages in a business activity within the customer's state. The limit: a business that presents only static text or photos on its website does not engage in business activity in the states where customers view it. Eleven examples sort the common functions. Protected: static frequently asked questions with answers; cookies that only remember cart items, stored customer information, or products previously considered; and a site that lets customers search for items, read descriptions, select items, choose delivery options, and pay. Unprotected: regularly providing post-sale assistance through chat or email that customers initiate from the site; soliciting applications for the seller's branded credit card; inviting electronically submitted applications for non-sales positions; placing cookies that gather customer search data used to adjust production schedules and inventory, develop new products, or identify new items to offer; remotely fixing or upgrading products by transmitting code to customers' devices; selling extended warranty plans through the site; contracting with a marketplace facilitator that holds the seller's inventory at fulfillment centers in the customer's state; and streaming video or music for a charge.

The pattern is Wrigley's: the protected cookie remembers the cart, the unprotected cookie feeds merchandising; the protected page answers a static question, the unprotected chat resolves a delivered customer's problem.

California: adopted by memorandum, voided by judgment, not re-adopted

The Franchise Tax Board issued Technical Advice Memorandum 2022-01 on February 14, 2022 and revised Publication 1050, Application and Interpretation of Public Law 86-272, in May 2022 to match. The memorandum's businesses are the Commission's examples in California dress, with one addition: a telecommuting employee in the state performing non-sales management and accounting work is unprotected. Post-sale chat or email assistance is unprotected because the sale has already taken place.

The American Catalog Mailers Association sued in San Francisco Superior Court in August 2022, pleading that the documents conflicted with the federal statute, that they were underground regulations issued without the rulemaking California law requires, and that their retroactive application violated due process. The court denied the association's motion for summary judgment on the claim that the documents conflict with the federal statute in August 2023, and no California court has held that the substance of the memorandum conflicts with federal law. In December 2023 the court granted the association summary adjudication on the underground-regulation claim and entered judgment, and in February 2024 it denied the Franchise Tax Board's motion to vacate and modify that judgment (American Catalog Mailers Association v. Franchise Tax Board, S.F. Super. Ct. No. CGC-22-601363). The agency's litigation roster lists the case among its recently closed matters, with no appeal in its status log.

The judgment did not decide whether a chat window or a cookie exceeds solicitation; it decided that the Franchise Tax Board could not announce that answer without rulemaking. The agency has not undertaken that rulemaking: its regulatory activity page and its 2026 rulemaking calendar list no project on the federal statute or internet activities. Yet Publication 1050 in its 2022 form remains posted without a withdrawal notice, the memorandum remains on the agency's index of technical advice memoranda, and the 2025 Form 100 instructions still direct readers to Publication 1050. An examiner may still argue on the facts that a particular website function is an independent business function under Wrigley; what the examiner may not do is treat the voided documents as binding. The companion article on California throwback develops the mirror image for a California seller.

New York: adopted by regulation, upheld on the merits

New York went the route California skipped. The Department of Taxation and Finance proposed its Article 9-A regulations in August 2023, and the adopted rule was published in the State Register of December 27, 2023. Section 1-2.10 restates the federal statute and adds the internet material. The operative sentence provides that solicitation does not include activities the corporation would have reason to engage in apart from the solicitation of orders but chooses to allocate to its New York sales force or to engage in via the internet, including interacting with customers or potential customers through the corporation's website or computer application, and then preserves the static-content limit: a corporation will not be made taxable solely by presenting static text or images on its website (20 NYCRR 1-2.10(f)). The same subdivision states the de minimis rule in Wrigley's words: activities are not de minimis if they establish a nontrivial additional connection with the state. The examples in subdivision (i) follow the Commission's list. Example 7 is the chat case: a corporation that regularly provides assistance to customers after its products have been delivered, through email or a chat the customer initiates from the website, is not exempt. Example 10 is the data-gathering cookie, not exempt; Example 11 is the cart-and-preferences cookie that performs no other function, exempt on the facts stated.

In April 2025, Albany County Supreme Court granted the Department summary judgment on the preemption claim, holding that the federal statute does not preempt the state's internet activities rule, and granted the association summary judgment on its due process claim, holding that applying the rule to periods before its December 2023 publication, a reach of nearly nine years back to January 1, 2015, violated due process for want of a valid public purpose (American Catalog Mailers Association v. Department of Taxation and Finance, Sup. Ct. Albany County, Index No. 903320-24). The association appealed. On May 7, 2026, the Appellate Division, Third Department affirmed, confining its review to the regulation as written and holding that the association had not shown that the regulation, on its face, revokes immunity Public Law 86-272 requires; the chat and cookie lines are the regulation's own examples, not holdings of the court (American Catalog Mailers Association v. Department of Taxation and Finance, 249 AD3d 1298, 2026 NY Slip Op 02908 (3d Dept. 2026)). The affirmance left the retroactivity ruling in place. The association has taken a further appeal, which the Court of Appeals listed among its new filings in June 2026 subject to the court's own inquiry into whether a substantial constitutional question supports an appeal as of right.

The New York result is the strongest authority on either side of the question, with four limits. It is a facial ruling that did not test the chat and cookie examples and leaves applied questions to each taxpayer's facts. It binds New York tribunals only. The due process holding confines the regulation to periods from its publication, leaving earlier years to the argument from Wrigley alone. And the association filed a further appeal in June 2026.

New Jersey: bulletin first, regulation second

The Division of Taxation issued Technical Bulletin TB-108 in 2023 for privilege periods ending on and after July 31, 2023, listing internet activities that do and do not exceed the federal protection, and most recently revised it on June 5, 2026. The Division then adopted N.J.A.C. 18:7-1.9A, internet activities conducted by a business, on May 19, 2025, effective June 16, 2025 (57 N.J.R. 1303(b)). Subsection (a) lists internet activities that exceed the protection, and subsection (b) lists those that do not. The unprotected list tracks the Commission's: transmitting code to fix or upgrade products under a service subscription or warranty contract the customer bought; placing cookies to gather data assembled for sale to data brokers or other third parties; selling targeted internet advertising; post-sale assistance through chat, email, or an application; contracting with in-state customers to stream video or music; subscription services; business services such as quality control, production line maintenance, or logistics delivered through internet-connected devices; and inviting applications for non-sales employment targeted at in-state residents. The protected list includes frequently asked questions, cookies used ancillary to solicitation and not to gather data for sale, a searchable site offering only tangible personal property, applications limited to sales positions, accepting electronic payment, and a non-fungible token used solely to transfer ownership of tangible personal property.

The rule has been challenged. The same association brought an action against it in the Tax Court of New Jersey, and the court ruled on the challenge in 2026 (American Catalog Mailers Association v. Director, Division of Taxation, Docket No. 010021-2025). Any New Jersey analysis reads that opinion alongside the rule's text. Two points stand on the instruments themselves. The rule states no applicability period; the July 31, 2023 line comes from the bulletin and predates the rule by almost two years, and that gap is where a New York-style due process argument would sit. And the rule's unprotected cookie is one whose data is packaged for sale to third parties, which is narrower than the Commission's production-and-inventory formulation, so a seller whose cookies inform its own merchandising but are never sold has a textual argument in New Jersey that it does not have in New York or Massachusetts.

The hard cases

The recurring fact pattern is a seller of goods, located in one state, selling nationally through a website with an interactive assistant that answers questions about pending orders, helps customers with product problems after delivery, and holds a conversation for its own sake. Under the Commission's protected list of in-state activities, the first function is ancillary to solicitation: a question about an unplaced order is part of the request for the order, and tracking an approved shipment falls within the protected activity of coordinating shipment or delivery without charge and providing related information before or after the order (Statement of Information, Article IV.B, item 8). The second function is the Commission's Example 2 and New York's Example 7: help with a delivered product's problems is customer service the seller would provide with or without a sales channel, and if the site provides it regularly it is unprotected under the New York and New Jersey instruments and, under Wrigley directly, arguable everywhere. The third function is addressed by no instrument; engagement features sit closer to advertising, which has always been protected, than to service, but the point is untested. The question is what the window is scripted and staffed to do.

Cookies turn on purpose and data flow. A privacy policy that discloses use of browsing data for product development, inventory planning, or merchandising supplies the facts of the unprotected example in the seller's own words, and privacy policies are archived; a policy that confines the data to the cart, the account, and recommendations supplies the protected example. Third-party analytics and advertising cookies are the open question: the instruments address the seller's cookies used for the seller's purposes, and a cookie placed by an advertising network for its own purposes is a different fact that none of them addresses.

The de minimis argument is made last and on the record. The Commission's statement says that activity conducted on a regular or systematic basis or pursuant to a company policy is normally not trivial, and New York's regulation imports Wrigley's nontrivial-additional-connection test. What might still be trivial is a feature that exists but is barely used, and that is a question of logs. A seller that can show a handful of post-sale chat sessions with customers in a state in a year has a de minimis argument; a seller that cannot measure usage has an assertion.

Protection is tested year by year and state by state. In New York, the regulation governs periods from its December 2023 publication and may not be applied earlier; in New Jersey, the bulletin reaches back to privilege periods ending on and after July 31, 2023 while the rule took effect June 16, 2025; in California there is no valid instrument, only the statute and Wrigley. In every state that has adopted nothing, the question is Wrigley applied to the website's functions, and a position should say so rather than borrowing another state's example list as if it were law.

Practice notes

The working file for a website question is a dated, function-by-function inventory of what the site and the post-sale operation do, built from the sources an examination will request: the assistant's scripts and escalation rules, chat and email logs by customer state, the cookie inventory and the privacy policies in force each year, the careers page, the warranty and subscription offerings, and any code pushed to sold products. Each function is sorted under the Wrigley question of whether the seller would perform it with or without a sales channel, then checked against the instrument in force in each market state for each year. A de minimis conclusion is supported with usage data by state and year or is not asserted. Two scope limits stay on the first page: the federal statute never reached sales and use tax collection, gross receipts taxes, or net worth taxes, and a site that sells services, subscriptions, warranties, or streaming alongside goods has unprotected sales regardless of interactivity. The watch items are a Franchise Tax Board rulemaking notice, the Court of Appeals' handling of the New York appeal, any appeal from the New Jersey Tax Court and further revisions to its bulletin, new state adoptions, and the federal proposals to redefine solicitation itself. G&G State Tax Group provides Public Law 86-272 reviews of website and post-sale activities, and state tax nexus consulting, alongside its state and local tax practice.