September 1, 2026
Tax Notes State: Extraterritoriality and the Internet — In the State Tax Event Horizon
On August 17, David Swetnam-Burland authored the latest installment of his Eyes on E-Commerce column for Tax Notes State, titled “Extraterritoriality and the Internet: In the State Tax Event Horizon.”
States and localities are increasingly taxing online business activity that occurs entirely outside their borders — from Colorado home-rule cities to income tax theories based on remote chat, credit card, and job-posting activity. In this article, Swetnam-Burland looks past the usual antidiscrimination and undue burden arguments to examine a less-discussed third strand of the dormant commerce clause: the extraterritoriality doctrine. Drawing on the Supreme Court’s 2023 decision in National Pork Producers Council v. Ross and subsequent circuit court rulings, he considers what limits this doctrine may place on states’ and municipalities’ authority to tax nonresident businesses for conduct that actually took place elsewhere.