e-Commerce and Taxation: Past, Present and Future

The study provides a detailed overview of the past and present state of collection on sales tax on e-commerce transactions. It examines the ways in which e-commerce influences taxation, the implications for not taxing e-commerce, and the potential for other mechanisms to collect revenue from online sales such as use tax and sales tax. The study analyzes how sales tax was calculated in the past by providing a background on the Internet Tax Freedom Act, Court rulings and Governmental decrees, Streamlined sales tax initiative and the Rule of permanent establishment for calculating tax jurisdiction. Further, the study provides an overview of the software available to track sales tax by states and concludes that it is extremely unlikely that e-commerce will not be taxed in the near future. The study throws some light on the emerging issues related to sales tax on e-commerce sales in the US.