Answer To The Problems Raised By State Taxation Of E-commerce

In early 1997, the National Tax Association ("NTA") formally convened NTA Project to discuss and evaluate the tax policy with broad-based membership from business, government, and academia. In September 1999, the NTA issued a final report which was approved by vote of the Project Steering Committee. The NTA Report discussed and examined the following seven major areas of inquiry with regard to State Taxation of E-Commerce: (i) Sales and use tax rates, (ii) Duty to collect sales and use taxes and other jurisdiction taxing issues, (iii) Sales and use tax base, (iv) Sourcing transactions for sales and use tax purposes, (v) Simplification of state and local sales tax administration, (vi) Telecommunications tax issues, and (vii) Implementation issues. Although the NTA Report described various resolutions and proposed recommendations regarding these issues, however, the Project members did not make any conclusions on any of these consensus or recommendations.

The following questions have been addressed in this article:

What other issues where discussed among the members with regard to the use and sales tax rate?
Will there be liability issues which may arise with developing sourcing rules dealing with audits and recordkeeping?


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