A federal panel has called for proposals to form a new e-commerce taxation
The Advisory Commission on
Electronic Commerce intends to create a structure for state and local
taxation of online transactions, as well as international tariffs. The
committee is investigating how online transactions are currently treated
and how often sales are crossing state and country borders. It is expected
to report on its research by April 21, 2000.
The proposals must address a list of 18 criteria, particularly a means of
meeting the committee goal of simplifying the current standards for tax
collection system. The panel warns that the creation of the criteria
“should not be interpreted as a decision to adopt a plan to implement
taxation of Internet-based transactions.”
The submissions will also be evaluated on whether it imposes new taxes, and
if those taxes are in any way discriminatory or could lead to an invasion
of privacy. The proposal’s influence on the local and federal government
revenue base is also considered.
The criteria also require an assessment of whether the proposed tax
standard is a “burden on sellers,” particularly smaller businesses and
As part of the committee’s goal to create a global standard, the
submissions must address the scalability of the proposed tax structure and
whether it affects America’s ability to compete internationally.
And as might be expected, the proposal will also need to be technologically
feasible and constitutionally valid, according to the committee. The
proposals must be received by November 15.
The commission will convene again December 14-15 in San Francisco, and will
call proposal authors to the meeting to discuss the taxation alternatives.