Online Shopping: Legal Challenges for Taxing Authorities
E-commerce offers customers the chance to eliminate many stages in the sales/distribution chain. The mark-ups that occur between manufacturers, wholesalers, distributors, retailers and consumers can add the cost of goods purchased by consumers. In contrast, when consumers deal directly with manufacturers on the internet, the process whereby intermediaries between the manufacturer and the final consumer are eliminated from the supply chain is known as "disintermediation".
E-commerce differs from mail order and telephone solicitation, the two most traditional forms of business using remote sellers, because these involve the delivery of goods by common carrier to and from a specific physical location. In short, there is still a physical delivery of property from an identifiable seller to an identifiable buyer. States jurisdictions have wrestled with the issue of collecting taxes from out-of-state mail order sellers and telephone solicitors for decades; e-commerce enables almost any business large or small to sell to customers in different states and countries.
Out-of-state vendors engaged in e-commerce do not have an obligation to collect sales taxes if traditional remote sellers, such as mail-order and telephone solicitation vendors, do not collect sales taxes. Sales tax cannot be levied on a transaction just because the purchaser uses e-commerce to access the seller's computer to acquire property, goods or service. Also, states cannot use an "agency nexus" theory to claim that a purchaser's ISP is an in-state agent for the seller.
Commerce Defies Traditional Tax Jurisdictions
Using the internet, a company can, in theory, move its e-commerce business to a tax-haven country and conduct e-commerce outside the jurisdiction of any country that would otherwise tax the transaction.
Also, because of the speed in which transactions occur and the frequent absence of a traditional paper trail, it will be very difficult, if not impossible, to apply traditional notions of tax jurisdiction. This is especially true with intangible property transmitted by computer such as software, digital music or electronic books and services.
While governments which depend on an income tax might have difficulty taxing e-commerce, states and local jurisdictions that rely on sales and property taxes to fund their operations could be in deeper trouble.
Lack of a Paper Trail
Unless a tangible product is delivered by common carrier, it is impossible for a taxing jurisdiction to determine that an e-commerce transaction occurred. For instance, if a consumer downloaded a computer game from a computer located in a foreign country for $19.95, paying by credit card, how would a taxing jurisdiction discover that such a transaction occurred?How would it determine the physical location of the seller? What if the purchaser had an internet service provider (ISP) in a foreign country as well?
Transmitting Property from Tangible to Intangible
Consider the following issues: Would the receipt of a computer game in electronic form convert the game into a non-taxable intangible item, whereas the purchase of the same game at a local computer store would be taxable because it is a tangible product?
Also, if a newspaper has an exemption from sales tax will a newspaper that is downloaded in electronic form receives the same exemption? If not, would the tax levied on the electronic version of the newspaper be a discriminatory tax in violation of the commerce clause?
Electronic money is a type of debit card similar to a telephone calling card where the card itself keeps track of the remaining balance, rather than a third party bank. This could emerge as the preferred medium of exchange for e-commerce. E-cash will have the same anonymity as cash does in the current "underground" economy. Use of e-cash will further frustrate states and local jurisdictions on taxing e-commerce.
Multiple taxes on the same transaction or service, either in the same taxing jurisdiction or two or more taxing jurisdictions, are prohibited. This could occur if a state-taxed internet access services as telecommunications and then taxed located telephone services as well. Unless a credit is given to eliminate any double-taxation, such a tax would violate the prohibition against multiple taxes.
The writer is an advocate of High Court and practicing immigration and corporate laws in Pakistan since September 2001. He is a self employed and pioneer in research on electronic commerce taxation in Pakistan. His articles were published widely in the critical areas of cyber crimes, electronic commerce, e-taxation and various other topics. He wrote LL.M thesis on titled "Legislation of electronic commerce taxation in Pakistan" in which he provided comprehensive legal proposals for statutory reconstruction of tax laws for purpose of imposition of taxation on e-business in Pakistan. Currently he is conducting is research on topic 'Electronic commerce taxation: emerging legal issues of digital evidence'.
Author can be contacted by email@example.com.
Alibaba, China's E-Commerce Giant, Will Split Into 6 Units The New York Times
Alibaba plans to split into six in radical overhaul Financial Times
Alibaba will ‘continue to be a dominant e-commerce services company’ despite split, strategist says - Yahoo Finance
Alibaba will ‘continue to be a dominant e-commerce services company’ despite split, strategist says Yahoo Finance
Rokt employee shared blackface photo during company Zoom Business Insider
Speaker Spotlight: Tom Funk on growing B2B and B2C ecommerce Digital Commerce 360
Early Warning Unveils Paze, Its Multi-Bank Wallet Aimed at Easing E-Commerce – Digital Transactions - Digital Transactions
Early Warning Unveils Paze, Its Multi-Bank Wallet Aimed at Easing E-Commerce – Digital Transactions Digital Transactions
Ecommerce Returns Dispositioning Targeted By Two Boxes Multichannel Merchant
Top 15 US Ecommerce Companies Forecast Insider Intelligence
12 New Ecommerce Books for Spring 2023 Practical Ecommerce
The Future of Ecommerce: How a Product Becomes a Purchase Andreessen Horowitz
E-Commerce Giant Alibaba Will Become 6 Different Entities Crunchbase News
GUEST COMMENT: How UK ecommerce sellers can successfully ... InternetRetailing
Romanian startup Videowise raises USD 3 mln to further develop its eCommerce video platform - Romania-Insider.com
Romanian startup Videowise raises USD 3 mln to further develop its eCommerce video platform Romania-Insider.com
Actually, Ecommerce Excelled in 2022 Practical Ecommerce
How inflation affects online businesses | Sponsored Content Insider Intelligence
Ecommerce Product Releases: March 15, 2023 Practical Ecommerce
Ecommerce upstarts navigate pandemic shopping reset Financial Times
United Kingdom B2C Ecommerce Market Opportunities Report 2023: Gross Merchandise Value (GMV) will Increase from $289.9 Billion in 2022 to Reach $405.5 Billion by 2027 - Yahoo Finance
United Kingdom B2C Ecommerce Market Opportunities Report 2023: Gross Merchandise Value (GMV) will Increase from $289.9 Billion in 2022 to Reach $405.5 Billion by 2027 Yahoo Finance
Ecommerce Product Releases: March 1, 2023 Practical Ecommerce
Current Partners With URLgenius to Accelerate Ecommerce Marketplace Traffic for Brands - The Herald Journal
Current Partners With URLgenius to Accelerate Ecommerce Marketplace Traffic for Brands The Herald Journal
Facebook's Advantage+ shopping campaigns: Are they worth the ... Search Engine Land
Bright Cellars Adopts DRINKS on Shopify to Streamline Compliance and Scale Ecommerce Operations - wineindustryadvisor.com
Bright Cellars Adopts DRINKS on Shopify to Streamline Compliance and Scale Ecommerce Operations wineindustryadvisor.com
Southeast Asia Retail Ecommerce Forecast 2023 Insider Intelligence
Finding today’s best B2B ecommerce teams Digital Commerce 360
Vehicle Subscriptions Gaining Traction Practical Ecommerce
Snap Partners With Kargo To Develop Offerings For Ecommerce ... MediaPost Communications
Temu is seeing unprecedented ecommerce growth—how seriously ... Insider Intelligence
Behind Paramount’s Ecommerce Push: A Chat With Consumer Products Chief Pam Kaufman - Hollywood Reporter
Behind Paramount’s Ecommerce Push: A Chat With Consumer Products Chief Pam Kaufman Hollywood Reporter
Livestream ecommerce takes off in Latin America Insider Intelligence
4 steps to a better ecommerce strategy Insider Intelligence
Ecommerce return rates rose in retail's longest holiday season yet Insider Intelligence
The rise of ecommerce in the coffee industry Perfect Daily Grind
Costco ecommerce sales drop despite total sales increase Digital Commerce 360
B2B Ecommerce: All the Information You Need Fordham Ram
What are the Financing Solutions for Ecommerce? London Post
Start an E-Commerce Side Hustle on a Budget Entrepreneur
Rolloverstock, a B2B Ecommerce Platform, Is Quietly Making ... BW Businessworld
Hot growth at an ecommerce-focused HVAC distributor Digital Commerce 360
E-commerce continues to grow in the EU European Commission
Role of IoT in Ecommerce in 2023 Customer Think
Ecommerce SEO Trends and Insights for 2023 Entrepreneur
2023 Consumer Trends Impacting eCommerce Profitability Supermarket News
Google Suspends Chinese E-Commerce App Pinduoduo Over ... Krebs on Security
Vietnam's eCommerce moves towards sustainable development The Star Online
DHGATE Group Unveils Core Strategies at Seller Conference 2023, Accelerating Expansion with an Innovative Cross-Border E-commerce Model - Yahoo Finance
DHGATE Group Unveils Core Strategies at Seller Conference 2023, Accelerating Expansion with an Innovative Cross-Border E-commerce Model Yahoo Finance
What is most important when designed UI for eCommerce? Rebellion Research
3 Ways E-Commerce Businesses Can Continue to Thrive Total Retail
Employees at the $2 billion e-commerce startup Rokt once saw a photo of a colleague in blackface during a company Zoom meeting - Business Insider Africa
Employees at the $2 billion e-commerce startup Rokt once saw a photo of a colleague in blackface during a company Zoom meeting Business Insider Africa
Shenzhen wants to become a global live-streaming e-commerce hub South China Morning Post
Slowdown in E-Commerce Hitting Logistics Companies' Payrolls ... The Wall Street Journal
Accepting Credit Cards For Your Online Business
Did you know that one of the best ways to increase sales for any online or offline business is to offer your customers the convenience of paying by credit card? As a merchant, you have several options available when it comes to becoming part of the credit card acceptance and processing chain. Here's a quick guide to get you thinking.
Tell Site Visitors What To Do
Your site visitors make all the choices when it comes to browsing the Web.No other medium gives users, readers or customers such control over their own experience.
10 Tips To Build, Manage And Profit From An E-Commerce Website
Just because you've built your e-commerce website doesn't mean the customers will begin to come. You need to bring in the visitors, showcase your products, convince them to buy, and bring them back yet again to make any significant gains.
How To Sell Websites Fast !
This article will explain in depth the steps needed to sell your website fast in today's marketplace.Step 1 Establish a Reasonable Price for Your SiteHow Much Can I Get?Before you sell, it's a good idea to know how much the domain is worth.
Does Your Shopping Cart Have a Squeaky Wheel?
Have you ever gone grocery shopping just before a holiday? The aisles are packed with people pushing carts, shelves need restocked, all the checkout lanes have long lines..
E-gold is a digital currency, used extensively on the Internet for making payments in exchange for goods and services.It is one of the first digital e-currency providers, having started in 1996.
The Internet and Customer Care: Aid or Anarchy?
It was reported in 'Marketing' magazine this month, that Britain is becoming a "disaffected nation", with each adult apparently making an average of 12 complaints to service providers each year, based on a "Service in Britain" survey by ASR (Andrew Smith Research). In response to the rise of the 'assertive consumer', brands are endeavouring to make sure 'good customer service' is a recognisable characteristic in the form of testimonials, efficient call centre responses and empowering staff throughout the company to resolve problems.
Overcoming Frustration with Technology
For whatever reason, when we get a new boost in productivity, whether that be from a tool, technology or technique..
eCommerce Software Solutions
All of the long, grueling nights and an unknown number of working weekends spent converting your dream into reality finally paid off-in a big way! Affiliates are signing up every single day and the clicks have really turned into cash. Your success is not limited to a lonely website but several and all of them are helping you move very diverse product lines.
Short Story: The Benefits of Shopping Online
Maria's new lifestyle: Short story about the benefits shopping on the Net has given to a dedicated artist.I've got this strange friend; her name is Maria.
Is Your Website Credit Card Friendly?
In my last column I discussed the process of credit card enabling your brick-and-mortar business. I pointed out that research has shown that accepting credit cards can help increase revenue and enhance cash flow.
Database: The Secret of Success
BENEFITS OF A DATABASEBy maintaining your list as a database, you can segment in many ways for targeting. Targeting improves the productivity of your offers.
Is It Easy to Build An E-commerce Web Site?
--Online Commerce--E-Commerce website is all about selling products and services over the Internet. Amateurs may think that it is easy to build your own e-commerce system and our advice to you is to stay away from these amateurs.
What Does It Take to Make Money Online?
What a loaded question! Let's narrow that down a bit and take it from the perspective of someone who wants to work from home and make money online in a home business. That will make it an easier question to answer.
7 Must Have Scripts to Look for When Shopping for E-commerce Hosting
When shopping for e-commerce hosting there are a lot of things you need to keep and mind. When you know what to look for it is a lot easier to ensure you get exactly what you need and not leave any important information out.
The Art of Being Human
This isn't the first time I have written about the benefits of inserting a human voice or presence into your online communications. And I make no excuse for writing about this again.
How To Accept Credit Cards Without a Merchant Account
To increase sales on your website, you must accept credit cards. To process credit cards, you could apply for a merchant account through your bank or other financialinstitution.
How To Find the Best Merchant Account For Your Business
What a great idea! Start accepting credit cards and watch your profits soar. Nothing could be simpler.
Complementary-Relational Linking and How It Could Save Your Internet Business
The concept of linking is that sites with common interestsshould link to drive more traffic to each other's businessesand to increase their "popularity." Search engines, such as Google, give much higher ranking to sites with highpopularity.
|home | site map|