Sales and Use Taxation of Internet Sales: The Evolving Case Law, 2009-2011

Technological developments over the past decade have resulted in an explosion in electronic commerce conducted over the internet.  However, state sales and use tax statutes, that were built around more traditional notions of commerce, have been slow to catch up with the rapidly-changing technological environment.  As a result, businesses engaged in electronic commerce have to navigate a labyrinth of laws that do not fully contemplate purchases from a home computer or sales from a web-based platform.  This presentation is designed to give an overview of the laws, constitutional issues and other issues that internet vendors must traverse in order to determine their state sales and use tax obligations.   

In broad strokes, businesses engaged in electronic commerce have to make two general inquiries.  First, the business must determine if its products or activity it engages in is taxable in any given state or locality.  Second, the business must determine if the United States Constitution allows the state to impose sales or use tax obligations on the business.  The focus of this paper is on this second inquiry.  

Please click here to read the full publication.