The proposal, officially submitted in Brussels earlier today, would require U.S. companies selling digital goods to consumers within the EU to register with a taxing authority, calculate, charge and remit VAT taxes. When companies sell digital goods to consumers it is often impossible for the vendor to know with any degree of certainty the location of the customer.
Transactions are largely anonymous.
There is no existing technology that determines customer location, nor is there any agreement by a third party, such as credit card processors, to disclose the billing address of the customer to facilitate taxation. Vendors cannot be held liable for the collection of sales taxes from states where they have no nexus within the U.S. Digital delivery of goods does not constitute nexus. By a standard of fairness, U.S. vendors should similarly not bear the burden of collecting a tax for the European Union. SIIA represents more than 1,000 leading high-tech companies that develop and market software and electronic content for business, education, consumers and the Internet. The Software and Information Industry Association .