By Stephanie Do and Andrew Appleby

The Indiana Department of Revenue determined that an out-of-state wireless communications equipment wholesaler’s in-state business activities were protected by P.L. 86-272, and therefore, the wholesaler did not have nexus for Indiana corporate income tax purposes. The wholesaler’s in-state activities were limited to shipping products to Indiana customers by common carrier and a sales employee who worked from his home office. The sales employee only solicited sales orders of the wholesaler’s products, not any services offered by the wholesaler. The sales orders were approved and fulfilled out-of-state. The Department evaluated the totality of the wholesaler’s business activities to determine whether its in-state activities were within the protection of P.L. 86-272. The Department reasoned that the wholesaler’s business activities were protected as either activities related to soliciting tangible personal property orders or as activities that did not rise above the de minimis level. Ind. Dep’t of Revenue, Letter of Findings No. 02-20130167 (Mar. 26, 2014).