Internet commerce and current tax code essays

Internet commerce and current tax code essays Internet commerce and the complexities of complying with state sales and use tax laws When a citizen of a state purchases goods from a vendor out of the state, usually they do not pay any sales tax to either state involved. Until fairly recently in our nations history, these transactions were made through catalog vendors and represented such a small amount of lost tax revenue that state tax agencies were not concerned enough to take any action. The addition of reliable and trustworthy electronic commerce (e-commerce) technologies in the late 1990s changed the equation somewhat. Now the volume potential of interstate retail transactions has the potential to rival the traditional brick and mortar retail channels. The combination of growing market share for e-commerce companies and cooling economic conditions has many states worried about sales tax income. This has most state taxing authorities asking how, if at all, e-commerce transactions should be taxed? There is much debate on this topic among tax officials, attorneys, lawmakers, and both e-commerce and tradi tional retailers. In my opinion, E-commerce transactions should be taxed as any other interstate retail transaction. To ensure the proper collection of sales and use taxes, e-commerce companies should be required to collect sales tax on behalf of all fifty states. In order to make this requirement logistically reasonable, states will need to dramatically simplify their sales and use tax code. There is a general misconception within the public on the nature of interstate e-commerce transactions and sales tax. Most people believe that if they purchase products from an out of state company via the internet, then the sale is tax free. This perception is caused by some specifics of how taxation is traditionally handled for interstate transactions. Sales tax jurisdiction is destination based. The physical location of the purchaser determines who is ...