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A comparison of United States and European union taxation of e-commerce

Published: 13 August 2006 Publication History

Abstract

Transactional taxes are an important source of revenue for government operations. The growth of borderless e-commerce, and digitally delivered goods and services, has created confusion about the e-vendor's obligation to collect and remit transactional taxes extra-jurisdictionally, resulting in a potential loss of tax revenue. This paper analyzes and compares transactional taxes in the United States (U.S.) and European Union (E.U.). In the U.S., a transactional tax is imposed, as a sales or use tax, by the states rather than by the national government. A proposed solution to the unique constitutional impediments to a U.S. state's ability to collect transactional taxes from e-commerce vendors is presented. Within the E.U., the member states impose a value added tax (VAT) on sales transactions. The implications and issues relevant to the E.U. directive affecting the taxation of E-commerce are discussed. Finally, a multi-jurisdictional agreement is recommended as a global solution.

References

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    cover image ACM Other conferences
    ICEC '06: Proceedings of the 8th international conference on Electronic commerce: The new e-commerce: innovations for conquering current barriers, obstacles and limitations to conducting successful business on the internet
    August 2006
    624 pages
    ISBN:1595933921
    DOI:10.1145/1151454
    Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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    New York, NY, United States

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    Published: 13 August 2006

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    Author Tags

    1. e-commerce taxation
    2. internet taxation
    3. sales tax
    4. use tax
    5. value added tax

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    ICEC '06 Paper Acceptance Rate 53 of 112 submissions, 47%;
    Overall Acceptance Rate 150 of 244 submissions, 61%

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