Jurisdiction Issues Of E-commerce Taxation
The Internet Tax Freedom Act ("ITFA"), pointed out some problems that e-commerce vendors face, such as taxation of the same transaction by multiple jurisdictions. Internet Tax Freedom Act, Pub. L. No. 105-277, Div. C, Title XI, 1104(6)(a), 112 Stat. 2681, 2681-719 (1998), as amended, addresses the issue of double taxation in e-commerce transactions and advice state fiscal authorities to delay taxation of online sales in their jurisdictions. Yet, the federal government allows the states and their various localities to control taxation within their jurisdictions. This system may create difficulties when the levying jurisdiction tries to tax a sales transaction in a jurisdiction where the buyer resides but the seller does not; this may result in multiple jurisdictions taxing the same transaction. As such, tax experts advocate for uniform, equitable and neutral tax policies for all transactions, regardless of the medium.
See "BUSINESS LAW A, ELECTRONIC COMMERCE 2, TAXATION a) FEDERAL LEGISLATION:Federal Legislation Regarding Taxation of Internet Sales Transactions", 16 Berkeley Tech. L.J. 415, 2001 by Christopher J. Schafer.
The following questions have been addressed in this article:Is Technology the Answer to Taxation of the Internet?
What would achieve Complete State Uniformity?