Taxation Of Electronic Commerce Research Articles

Taxation of e‐commerce in Hong Kong: applying UK and US experience

Due to the rapid growth of electronic commerce worldwide, the traditional approach of taxing business profits in Hong Kong, a source‐based common law jurisdiction, warrants a close review as to its compatibility with such a modern way of doing business. Although the Inland Revenue Department of Hong Kong has issued its views on the taxation of electronic commerce profits as Departmental Interpretation and Practice Note 39, much of the treatment of such profits follow the conventional wisdom of taxing business profits as set in the source‐based rules. This paper reviews the present situation of taxing profits arising from electronic commerce transactions in Hong Kong and compares it with the cases of the UK and the USA. Problems in formulating water‐tight tax law, accounting standards for intangible assets, and coping with cross‐border fraud, indicate that progress may not be straightforward. Issues as to fairness, and the difficulty of taxing such receipts are raised, followed by recommendations.

THINKING STRAIGHT ABOUT THE TAXATION OF ELECTRONIC COMMERCE: TAX PRINCIPLES, COMPLIANCE PROBLEMS, AND NEXUS

The Internet Tax Freedom Act (ITFA), which imposes a moratorium on state and local taxes on Internet access and prohibits "multiple and discriminatory" state and local taxes on electronic commerce, has been extended until November 1, 2003, but the debate on whether and how to tax electronic commerce has not ended. This paper is intended to assist clear thinking about the taxation of electronic commerce. Under an economically neutral sales tax, all sales to consumers would be taxed, all sales to business would be exempt, and sales by local merchants and by remote (out-of-state) vendors would be taxed equally. A compliance-friendly sales tax would exhibit substantial simplicity and interstate uniformity in the tax base, legal framework, and administrative procedures. Existing sales taxes exhibit none of these characteristics. Many sales to consumers are exempt, many sales to business are taxed, and, because of the Supreme Court decision in Quill, which is based on the complexity of the system, many sales by remote vendors are not taxed. The system is extremely complex, in large part because there is essentially no uniformity from state to state. Under the Streamlined Sales Tax Project the states have recently begun serious efforts to simplify their sales taxes, by making them more nearly uniform, in hopes of gaining Congressional or judicial reversal of Quill. These efforts would substantially simplify the system, but would not achieve economic neutrality, as many sales to consumers would remain exempt and many sales to business would still be taxed. Moreover, differences in tax bases, legal frameworks, and administrative procedures would remain. Technology (lookup tables that categorize products as taxable or exempt in each state) might be able to handle differences in tax bases, but not those in legal structures and administrative procedures.

Taxation of Electronic Commerce: A Developing Problem

The rapid growth of e-commerce, especially the sale of goods and services over the internet, has fuelled a debate about the taxation regimes to be used. The shift from a physically oriented commercial environment to a knowledge-based electronic environment poses serious and substantial issues in relation to taxation and taxation regimes. Tax administrations throughout the world face the formidable task of protecting their revenue base without hindering either the development of new technologies or the involvement of the business community in the evolving and growing e-market place. Concerns of governments centre on the impact of e-commerce on the state and local revenue. Whereas states can impose a tax on residents' purchases from out-of-state vendors, they cannot impose an obligation on those vendors to collect the tax unless the vendor has a substantial presence, or nexus, in the state. These problems will be greater for developing countries. The shrinking of the tax base will have a disproportionate effect and further jeopardize the already fragile economy of the developing world.

Thinking Straight about the Taxation of Electronic Commerce: Tax Principles, Compliance Problems, and Nexus

The Internet Tax Freedom Act (ITFA), which imposes a moratorium on state and local taxes on Internet access and prohibits "multiple and discriminatory" state and local taxes on electronic commerce, has been extended until November 1, 2003, but the debate on whether and how to tax electronic commerce has not ended. This paper is intended to assist clear thinking about the taxation of electronic commerce. Under an economically neutral sales tax, all sales to consumers would be taxed, all sales to business would be exempt, and sales by local merchants and by remote (out-of-state) vendors would be taxed equally. A compliance-friendly sales tax would exhibit substantial simplicity and interstate uniformity in the tax base, legal framework, and administrative procedures. Existing sales taxes exhibit none of these characteristics. Many sales to consumers are exempt, many sales to business are taxed, and, because of the Supreme Court decision in Quill, which is based on the complexity of the system, many sales by remote vendors are not taxed. The system is extremely complex, in large part because there is essentially no uniformity from state to state. Under the Streamlined Sales Tax Project the states have recently begun serious efforts to simplify their sales taxes, by making them more nearly uniform, in hopes of gaining Congressional or judicial reversal of Quill. These efforts would substantially simplify the system, but would not achieve economic neutrality, as many sales to consumers would remain exempt and many sales to business would still be taxed. Moreover, differences in tax bases, legal frameworks, and administrative procedures would remain. Technology (lookup tables that categorize products as taxable or exempt in each state) might be able to handle differences in tax bases, but not those in legal structures and administrative procedures.

International Taxation of Multinational Enterprises (MNEs)

MNEs are likely to continue to grow because of factors such as globalisation and electronic commerce. Many countries are reforming their international tax systems in order to attract MNEs into their jurisdictions to do business within their borders and also to promote overseas growth of their resident corporations. Issues such as taxation of electronic commerce, transfer pricing and harmful tax competition need to be addressed. Practical solutions for the future can include: a model convention for the taxation of MNEs; unitary accounting for MNEs; a multilateral treaty; or a global system of registration of MNEs.

The National Tax Association's Project on Electronic Commerce and Telecommunication Taxes

This article reviews the recently completed National Tax Association's special study on the taxation of Electronic Commerce and Telecommunication. It describes the major issues examined by the study group and notes the potential effect the Final Report is having on the current debate. It also suggests areas in which both government officials and private practitioners must continue to seek cooperation on the complex problems of the taxation of electronic commerce and telecommunications.

"The Day the Sales Tax Died"

Previous article No Access"The Day the Sales Tax Died"Tax Tunes and Billy HamiltonTax Tunes Search for more articles by this author and Billy Hamilton Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by National Tax Journal Volume 53, Number 4.3December 2000Number 4, Part 3. The Taxation of Electronic Commerce Published for: The National Tax Association Article DOIhttps://doi.org/10.1086/NTJ41789528 Views: 3Total views on this site © 2000 National Tax Association. All rights reserved.PDF download Crossref reports no articles citing this article.

Federal Constitutional Limitations on Congressional Power to Legislate Regarding State Taxation of Electronic Commerce

Recent Supreme Court decisions taking a restrictive ap- proach to Congress' power to regulate interstate commerce under the Commerce Clause and a broader view of states' immunity from suit under the Eleventh Amendment arguably cast doubt on Con- gress' power to legislate a comprehensive solution to the problems raised by state taxation of electronic commerce. A fair reading of the U.S. Supreme Court's recent decisions reveals that these concerns are unwarranted. In fact, the Court has reaffirmed the core Com- merce Clause principles that accord Congress ample power to legis- late regarding state taxation of electronic commerce. Moreover, what- ever limits there may be on Congress's power to create federal juris- diction over nonconsenting states, Congress may employ a variety of methods, short of outright coercion, by which it may induce a state to adopt a legislative program consistent with federal interests.

International Taxation of Electronic Commerce: An Emerging Framework

International Taxation of Electronic Commerce: An Emerging Framework

The ATO, Tax and the Internet: The Emperor’s New Clothes?

This article provides an analysis of the Australian Taxation Office’s (“ATO”) second report on the taxation of electronic commerce, Tax and the Internet, in the context of international developments. It begins with an overvie of the basic principles that international consensus has determined will apply to taxation of electronic commerce and how they apply in Australia. A substantial part of the article covers the ATO discussion of the current state of the Internet and the opportunities this affords the ATO, particularly to improve its service delivery. The remainder of the article discusses the impact of electronic commerce on the three crucial areas of jurisdiction to tax, the administration of the tax system and indirect taxation.

Old and New Issues in the Taxation of Electronic Commerce

Old and New Issues in the Taxation of Electronic Commerce

The Economics of Taxing Electronic Commerce

The Internet pricing theory and the economics of taxation are the theoretical foundation of taxation on the Internet. This article examines the pros and cons of taxing Internet commerce and analyzes the main issues on electronic commerce taxation, including the roles of government, state tax issues, and software taxation.

TRANSACTION TAXES AND ELECTRONIC COMMERCE: DESIGNING STATE TAXES THAT WORK IN AN INTERSTATE ENVIRONMENT

Identifies key issues and recommends policy guidelines for state taxation of electronic commerce. Considers uniformity, administrability, nexus, transmission- and content-based services, and double taxation. Argues for a congressional mandate to ensure uniformity.

International Taxation of Electronic Commerce

This article submits proposals for taxing the digital economy on the basis of the benefits and single tax principles.

State and Local Taxation. Cases and Materials

More student friendly than ever, the Tenth Edition provides more student guidance and roadmapping than previous editions. It covers constitutional structure first (jurisdiction to tax, Commerce Clause, intergovernmental immunities, etc.) and specific taxes second (i.e., property taxes, corporate and personal income taxes, and sales taxes). Additionally, it includes new and extended coverage of developments in the state taxation of electronic commerce, including jurisdiction to tax remote sellers and the sales and income tax treatment of digital products and cloud computing. A brief introduction to value-added taxes (VATs) has also been added.