E-COMMERCE and STATE CORPORATE INCOME TAXES: A Tricky Intersection

Companies increasingly engage in transactions with customers in a state while lacking any of the contacts traditionally associated with sales of goods or performance of services. Sales of products can involve downloads and streaming of items that cannot be touched or held; services can be performed...

Full description

Saved in:
Bibliographic Details
Published inJournal of Multistate Taxation and Incentives Vol. 27; no. 2; p. 6
Main Authors Oaks, Melissa, Newton-Clarke, Rebecca
Format Trade Publication Article
LanguageEnglish
Published Boston Thomson Reuters (Tax & Accounting) Inc 01.05.2017
Subjects
Corporate income tax
Due process of law
Electronic commerce
Independent contractors
Interstate commerce
Jurisdiction
Multistate taxation
Net income
Nexus rules
Personal property
Protection
State court decisions
State laws
State taxes
Streaming media
Supreme Court decisions
Taxation
Third party
United States > US
Online AccessGet full text
ISSN1533-3124

Cover

More Information
Summary:Companies increasingly engage in transactions with customers in a state while lacking any of the contacts traditionally associated with sales of goods or performance of services. Sales of products can involve downloads and streaming of items that cannot be touched or held; services can be performed remotely, rather than in proximity to the customer. These "pure e-commerce transactions" raise many corporate income tax issues that states are only beginning to consider, much less address. A handful of states have provided detailed guidance, but many states have offered little to no guidance concerning apportionment of pure e-commerce transactions. The preliminary issue in the pure e-commerce context is nexus, or the state's jurisdiction to tax. The Due Process Clause guarantees both substantive and procedural due process. Even in states that have addressed digital products and remote sales, substantial questions remain. These questions will likely be the subject of litigation in the coming years, particularly as additional states adopt market-based sourcing and economic nexus provisions.
ISSN:1533-3124