Congress moves to shield remote tech giants from state taxes
H.R. 9244 — Business Activity Tax Simplification Act of 2026 · Filed by Pat Harrigan (R-NC) · Introduced Jun 10, 2026 · Referred to committee
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What it does
This bill amends a 1959 federal law to prevent states from taxing remote businesses unless they have significant physical presence in the state. It extends protections to digital goods and services, requires at least 15 days of physical presence annually to trigger state tax jurisdiction, and limits states' ability to tax out-of-state companies through independent contractors or remote information gathering. The primary beneficiaries are remote and digital businesses (e-commerce, cloud services, software companies) that currently face multi-state tax obligations; the cost falls on states and localities that lose tax revenue from these businesses.
Why we flagged it
The bill's core function is to exempt remote and digital businesses from state tax jurisdiction by imposing a strict physical-presence requirement. While framed as 'simplification,' it functionally shields profitable out-of-state companies from multi-state taxation, reducing state revenue.
What the text implies
- States lose tax revenue from high-margin digital and remote businesses (cloud computing, SaaS, e-commerce), forcing them to raise taxes on residents or cut services.
- The 15-day de minimis threshold is easily gamed: a company can maintain market presence through independent contractors and remote operations without triggering tax jurisdiction.
- Small in-state businesses that cannot operate remotely face higher effective tax rates relative to out-of-state competitors, creating competitive disadvantage.
- The bill's definition of 'digital good' and 'digital service' is broad enough to cover most modern business activity, potentially exempting entire sectors from state taxation.
- Combined reporting and apportionment rules are weakened, allowing affiliated corporate groups to shift income to low-tax or no-tax jurisdictions.
Who it affects
Ordinary citizens and state/local governments lose tax revenue that funds schools, roads, and services, while remote and digital businesses gain a federal exemption from state taxation. This shifts the tax burden away from profitable out-of-state corporations onto local residents, in-state businesses, and reduced public services.
Who stands to gain
- e-commerce platforms
- cloud computing providers
- software-as-a-service (SaaS) companies
- digital media and streaming services
- remote staffing and consulting firms
- technology companies with minimal physical footprint
Named in the bill
Public Law 86-272, Business Activity Tax Simplification Act of 2019, Internal Revenue Code Section 1361, State and local tax authorities, Digital goods and services providers
Where it stands
- Jun 10, 2026 — Introduced · Congress.gov: “Introduced in House”
- Jun 10, 2026 — Referred to House Committee on the Judiciary · Congress.gov: “Referred to the House Committee on the Judiciary”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
How this was measured
Analysis — Quorum's AI read the full bill text on Jul 9, 2026; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
As of — page rendered 2026-10-20.
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