Question

Which of the following activities exceeds the definition of mere solicitation under PL 86-272?

a) Taking and holding orders that are approved outside the state.
b) Mere solicitation of orders for sales of tangible personal property.
c) Providing product information to customers.
d) Negotiating contracts on behalf of the out-of-state company.

Answer 1

Under PL 86-272, mere solicitation refers to activities that solicit orders for sales of tangible personal property. Taking and holding orders that are approved outside the state and providing product information are considered mere solicitation. Negotiating contracts on behalf of the out-of-state company exceeds the definition of mere solicitation.

Correct option is a and d.

Step-by-step explanation:

Under PL 86-272, which provides protection against state taxation for out-of-state companies, mere solicitation refers to activities that do not go beyond soliciting orders for sales of tangible personal property. Activities like taking and holding orders that are approved outside the state and providing product information to customers are considered mere solicitation and fall within the protection of PL 86-272. However, negotiating contracts on behalf of the out-of-state company exceeds the definition of mere solicitation and is not covered by the protection of PL 86-272.