a comparison of united states and european union taxation of e-commerce
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.
use tax value added tax sales tax e-commerce taxation internet taxation