Issues of Internet Taxation
Related Sites
History of Internet Taxation in the United States
- Currently at least 12 states tax internet access (i.e. taxes on ISP charges), and 10 states collect tax on data downloads.
- There are over 30,000 tax jurisdictions in the United States
- The current law of phone/mail order commerce allows for taxation only when the buyer and the seller are located in the same state or when the seller has a substantial "nexus" in the buyer's state. This law should apply to e-commerce as well, but many states are not following suit.
- First Federal government legislation applicable to taxation is found in the Internet Tax Freedom Act of 1998 (Public Law 105-277)
- This law arose out of the principle that information should not be taxed and that the internet lent itself to complex, unfair, and often burdensome taxation of commerce. Especially concerning was the prospect for extreme taxation measures such as taxing every bit or "packet" of information transacted.
- U.S. House Representative Cox conceived legislation in June 1996. Signed into law Oct. 21, 1998, recognizing that massive economic changes were to come and time would thus be needed to review this issue.
- What the Internet Tax Freedom Act Does:
1. Establishes no new taxes imposed by state/local gov. on Internet access (from Oct. 6, 1998 to Oct. 21. 2001)
2. No multiple taxes on e-commerce.
3. No discriminatory taxes on e-commerce (i.e. taxes that place e-commerce at a disadvantage to more traditional commerce).
4. No taxes on information exchanged on the Internet that has no comparable off-line equivalent (e-mail, etc.)
5. Meant to prohibit expansion of tax authority
6. Establishes Advisory Committee on Electronic Commerce to study the implications of internet taxation and produce formal policy recommendations to Congress by April 21, 2000. This committee met for the second time Sep. 14th-15th.
7. Creates no federal taxes on e-commerce or access.
8. Promotes and urges the Internet to be a global tariff free zone.
I. Taxation on ISP Access
II. Taxation on Goods Sold
Current status of E-Commerce Taxation
Issues Associated with E-Commerce Taxation
III. Taxation on Information and Other Non-Tangibles
Current Status of Taxation of Non-Tangible Goods
Issues Associated with Taxation of Non-Tangible Goods
IV. Other issues
http://www.ecommercecommission.org
This is the official website for the Advisory Committee on Electronic Commerce.
This committee was created by the Internet Tax Freedom Act to investigate U.S.
Internet taxation and eventually recommend policy to Congress. The site contains
extensive information on the makeup of the commission, events from commission
meetings, and press information. You could list this website in the body of
our update under point 6 of the Internet Tax Freedom Act.
http://www.nettaxfairness.org
This site is for The Internet Tax Fairness Coalition. This coalition contains
business, consumers, and other industry groups seeking the equitable treatment
of the Internet.
http://cox.house.gov/nettax
This is the homepage for The Internet Tax Freedom Act of 1998 as presented by
the act's primary sponsor, Rep. Cox. This site contains extensive information
about the act including analysis and history. Also included is general information
about Internet taxation throughout the country. You could include this link
in the body of the update where the internet tax freedom act is introduced.
http://home.cnet.com
At this site, if you search for internet taxation a good deal of related articles
come up. Specifically this link www.vertexinc.com/taxcybrary20/CyberTax_Channel/taxchannel_70.html
has a nice state-by-state outline of the many Internet taxation stances.