| E-commerce offers customers the chance to
| |
| | could be in deeper trouble.Lack of a
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| eliminate many stages in the sales
| |
| | Paper TrailUnless a tangible product is
|
| distribution chain. The mark-ups that
| |
| | delivered by common carrier, it is
|
| occur between manufacturers, wholesalers,
| |
| | impossible for a taxing jurisdiction to
|
| distributors, retailers and consumers can
| |
| | determine that an e-commerce transaction
|
| add the cost of goods purchased by
| |
| | occurred. For instance, if a consumer
|
| consumers. In contrast, when consumers
| |
| | downloaded a computer game from a
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| deal directly with manufacturers on the
| |
| | computer located in a foreign country for
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| internet, the process whereby
| |
| | $19.95, paying by credit card, how would
|
| intermediaries between the manufacturer
| |
| | a taxing jurisdiction discover that such
|
| and the final consumer are eliminated
| |
| | a transaction occurred?
|
| from the supply chain is known as
| |
| | How would it determine the physical
|
| "disintermediation".E-commerce differs
| |
| | location of the seller? What if the
|
| from mail order and telephone
| |
| | purchaser had an internet service
|
| solicitation, the two most traditional
| |
| | provider (ISP) in a foreign country as
|
| forms of business using remote sellers,
| |
| | well?Transmitting Property from Tangible
|
| because these involve the delivery of
| |
| | to IntangibleConsider the following
|
| goods by common carrier to and from a
| |
| | issues: Would the receipt of a computer
|
| specific physical location. In short,
| |
| | game in electronic form convert the game
|
| there is still a physical delivery of
| |
| | into a non-taxable intangible item,
|
| property from an identifiable seller to
| |
| | whereas the purchase of the same game at
|
| an identifiable buyer. States
| |
| | a local computer store would be taxable
|
| jurisdictions have wrestled with the
| |
| | because it is a tangible product?Also, if
|
| issue of collecting taxes from
| |
| | a newspaper has an exemption from sales
|
| out-of-state mail order sellers and
| |
| | tax will a newspaper that is downloaded
|
| telephone solicitors for decades;
| |
| | in electronic form receives the same
|
| e-commerce enables almost any business
| |
| | exemption? If not, would the tax levied
|
| large or small to sell to customers in
| |
| | on the electronic version of the
|
| different states and
| |
| | newspaper be a discriminatory tax in
|
| countries.Out-of-state vendors engaged in
| |
| | violation of the commerce clause?E-cash
|
| e-commerce do not have an obligation to
| |
| | IssuesElectronic money is a type of debit
|
| collect sales taxes if traditional remote
| |
| | card similar to a telephone calling card
|
| sellers, such as mail-order and telephone
| |
| | where the card itself keeps track of the
|
| solicitation vendors, do not collect
| |
| | remaining balance, rather than a third
|
| sales taxes. Sales tax cannot be levied
| |
| | party bank. This could emerge as the
|
| on a transaction just because the
| |
| | preferred medium of exchange for
|
| purchaser uses e-commerce to access the
| |
| | e-commerce. E-cash will have the same
|
| seller's computer to acquire property,
| |
| | anonymity as cash does in the current
|
| goods or service. Also, states cannot use
| |
| | "underground" economy. Use of e-cash will
|
| an "agency nexus" theory to claim that a
| |
| | further frustrate states and local
|
| purchaser's ISP is an in-state agent for
| |
| | jurisdictions on taxing
|
| the seller.Commerce Defies Traditional
| |
| | e-commerce.Multiple TaxesMultiple taxes
|
| Tax JurisdictionsUsing the internet, a
| |
| | on the same transaction or service,
|
| company can, in theory, move its
| |
| | either in the same taxing jurisdiction or
|
| e-commerce business to a tax-haven
| |
| | two or more taxing jurisdictions, are
|
| country and conduct e-commerce outside
| |
| | prohibited. This could occur if a
|
| the jurisdiction of any country that
| |
| | state-taxed internet access services as
|
| would otherwise tax the transaction.Also,
| |
| | telecommunications and then taxed located
|
| because of the speed in which
| |
| | telephone services as well. Unless a
|
| transactions occur and the frequent
| |
| | credit is given to eliminate any
|
| absence of a traditional paper trail, it
| |
| | double-taxation, such a tax would violate
|
| will be very difficult, if not
| |
| | the prohibition against multiple
|
| impossible, to apply traditional notions
| |
| | taxes.The writer is an advocate of High
|
| of tax jurisdiction. This is especially
| |
| | Court and practicing immigration and
|
| true with intangible property transmitted
| |
| | corporate laws in Pakistan since
|
| by computer such as software, digital
| |
| | September 2001. Author can be contacted
|
| music or electronic books and
| |
| | by Adil Law Company (Advocates and
|
| services.While governments which depend
| |
| | Immigration lawyers) Office No.3 2nd Flr
|
| on an income tax might have difficulty
| |
| | Hafeez Chambers 85 The Mall Rd Lahore
|
| taxing e-commerce, states and local
| |
| | Pakistan Telephone: +9242-6306195 +9242-
|
| jurisdictions that rely on sales and
| |
| | 6360108 Fax: + 9242 6360108 Cell: +92300
|
| property taxes to fund their operations
| |
| | 4254910 E-mail: adil.
|
