Vanderbilt Law Review

First Page



In recent years significant technical advances have enabled large corporations to sell into states from great distances and with a minimum of contact in those states. Nevertheless, the states and their political subdivisions are confronted with the claims of corporations that jurisdictional barriers to corporate income taxes should be raised, that improved enforcement techniques should be prohibited, and that certain classes of income should be immunized completely from state taxation. These revolutionary technical advances have created both major tax administration problems and tax administration opportunities for the states. Some of the latter, however, remain unexploited. This article examines the ramifications of these changes insofar as they are affected by interstate commerce and insofar as they affect state taxation and concludes that demands being made by businesses for higher jurisdictional barriers constitute primitive attempts to deal with modern problems in terms of obsolete historical concepts. Alternative approaches are recommended that capitalize on modern opportunities for improved tax administration.