...TAXATION OF INTERNET SALES Spencer Powell Park University Internet Campus A course paper presented to the School for Arts and Sciences and Distance Learning Business Law I Dr. Cathy Taylor Park University April 27, 2013 This paper or presentation is my own work. Any assistance I received in its preparation is acknowledged within the paper or presentation, in accordance with Park University academic honesty policies. If I used data, ideas, words, diagrams, pictures, or other information from any source, I have cited the sources fully and completely in a citation within the paper and also listed on the reference page. This includes sources which I have quoted or that I have paraphrased. Furthermore, I certify that this paper or presentation was prepared by me specifically for this class and has not been submitted, in whole or in part, to any other class in this University or elsewhere, or used for any purpose other than satisfying the requirements of this class, except that I am allowed to submit the paper or presentation to a professional publication, peer reviewed journal, or professional conference. This is not a draft, and is submitted for grading to satisfy in part the requirements for this course and the program(s) in which I am enrolled. In typing my name following the word 'Signature', I intend that this certification will have the same authority and authenticity as a document executed with my hand-written signature. ...
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...Mazerov argues that it’s only fair to have taxes on internet sales as online shoppers gain too much an unfair advantage over the retailers. Mazerov opines that the supreme court decision that prevented states from collecting taxes from internet sales made by retailers who have no place of business in those specific states. The effect of taxation on online sales is that shoppers will have to pay taxes to the state as one would in a local retail store. It is the absence of taxes on internet sales that attracts so much notoriety and clientele and some people have argued that introduction of internet sales taxes would greatly reduce the merchandise that is moved online. On the same note, the government by taxing, which may cause downward fall of sales online would eventually reduce the estimated taxes to be collected. The argument that retailers would not benefit is however flawed, as it is the buyers who pay the taxes and not the sellers. Also the retailers have a lot to benefit from the state in services such as police protection, firefighting, healthcare and education. The decision made by the Supreme Court requires the congress to give the States power to tax internet businesses in their jurisdictions. But why tax sales in the internet? Some of the arguments posed are that, firstly, Mazerov argues that a lot of important taxes are lost, which money could be channeled to improving the economy, hospitals, education and infrastructure amongst other things. About $10 billion is lost...
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...Should there be an Internet sales tax? Should we tax the Internet? That's a question that lingers in our minds. I think Internet taxation means that there will be taxes applied to things purchased on the Internet. Sales made over the Internet are called "E-commerce". As the Internet grows so does the the taxes and the overall cost of doing business via the Internet. The Internet sales tax issue came about in 1998, that's when the Internet was just starting to open up. This is an issue that covers many grounds. A issue for both sides Internet taxation is a very hot button issue that has hit all sides of the spectrum in heated debates. The misconception is that Internet sales tax is simply taxing of purchases brought on the Internet either through business to consumer e-commerce or consumer-to-consumer e- commerce. As this is one issue another issue is to those behind the scenes is the second half of this "complex issues" the use of the Internet in the lieu of a telephone line. Both of these issues could affect consumers and businesses alike, but in different ways. When we hear Internet Taxation we think of words like "sales tax" But it is much more complicated than just a simple tax on goods sold. All in all the question of whether to tax the Internet is far from black and white. Proponents and Opponents from both sides of the political spectrum do make convincing arguments. But it is all really in the hands of the people. If the people...
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...Internet Taxation Solutions for Amazon, Inc. Guy D. Hugaert October 9, 2011 IS 535 Professor Amita Suhrid-Cherewick Internet Taxation and Legislation One of the hottest political issues regarding taxation is how to tax revenue generated on the internet. Before the internet, stores were required to collect the appropriate sales tax rate in the state where the store was located. The store then forwarded the collected tax to the state tax collector. This system was working fine and was quite simple until the invention of the internet. The system has not changed for the traditional ‘brick and mortar’ store but things are much different for the ‘online’ store. This is where it gets interesting, how do we ensure that the sales taxes are paid or who is responsible for collecting the tax and what rate is paid and what state gets the taxes? For example, where should any sales tax is paid for candy ordered via the Internet from an Ohio vendor by a California resident while traveling in Georgia that is sent to a relative in Michigan (Nellen, 1999)? When the internet went commercial in 1995 it was free of regulation and taxes from the US government at all levels until 1996 when several US states saw the Internet as a great source of revenue for their states. Ten states (Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington & Wisconsin) started charging ISP’s an Internet access tax. This lead to the authoring of the...
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...E-commerce Taxation: Towards its Legalization Have you ever wanted to buy something with just one click without having to pay much as the usual? With the easy access and affordable prices, online purchasing has become the most convenient way of shopping for most teenagers. The popularity of the Internet particularly Facebook, Instagram and other social networking sites attracted many retailers to invest their businesses online without having to pay taxes like any other retailers do. By this, e-commerce continues to grow with the advancement in technology as it overshadows the traditional way of running a business by the insignificant purpose of the physical interaction between the buyer and the seller. E-commerce in itself is classified into three types: business-to-consumer in which online stores sell products to final consumers; consumer-to-consumer just in the case of eBay and Amazon and; business-to-business which involves job recruiting, online advertising, credit, sales, and the like (U, 2002, p.6). With the emergence of e-commerce, brick and mortar stores are slowly starting to degrade, thus alarming the government on the collection of lesser tax since the law regarding electronic commerce taxation is still being debated. This income generating phenomenon has been an attractive target to the government to cope with its huge loss on tax collection. So why pay tax? Richard Carlson (2002) once said, “At tax time, it helps to remember that if your tax obligation has increased...
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...“TAXATION OF E-COMMERCE AND ITS CHALLENGES” The advancement in the technological world gave rise to E-commerce. It is the new buzzword of the 21st century. In terms of accounting "E-commerce is the process of buying, selling, or exchanging products, services, or information via computer networks through the use of internet”. It offers a new way of conducting, managing and executing business transactions using modern information technology without any geographical barriers. It has redesigned the traditional mode of business which is based on –physical presence and physical delivery of goods and services. E-commerce is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services. This article is an attempt to highlight the key issues in the area of ecommerce taxation analyzing and understanding the existing tax legitimate. Since EC can be conducted virtually instantaneously around the globe and around the clock, the question where the profits should be taxed becomes crucial. Taxing the Internet is a topic haunting governments from all over the world. The Need To Tax The e-commerce industry of India is one of the fastest growing segment in the Asia Pacific region. With a staggering CAGR of 34.58% from 2009 to 2012, the Industry has expanded from INR 19249 Crore (USD 3.49 bn) to INR 47,349 Crore (USD 8.60 bn) in a matter of 3 years. Electronics and Apparel are the biggest categories in terms of sales....
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...E-commerce is a promising and profitable sphere of the economy. But due to its specific nature, it faces many development problems. For example, buyers and sellers highly appreciate the convenience and simplicity of transactions, using the Internet. But along with the comfort for honest subjects of electronic commerce, these characteristics give rise to a powerful platform for the successful operation of dishonest entrepreneurs. As an example, there are many expensive products sold through the Internet store, which in fact are fake. There are also a number of problems that slow the development of electronic commerce. E-commerce involves the implementation of various trade transactions, both intra-national and foreign trade. But the implementation...
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...Warcraft meets Farmville. As you can imagine, this is an interesting place to be the "tax guy". Steve Hagy, our CEO, has spent the last several months re-evaluating our business model. He wants to get out of the business of shipping disks. His vision is to move the delivery of our gaming software to an internet platform. There’s been a lot of discussion around how best to make this happen. The IT guys have laid out a good argument for delivery via a “cloud” solution. The Operations team believes we would have more control if we kept things “in-house”. The Product Development and Marketing folks want everything yesterday. The leadership team is looking to me to provide insights on the tax issues involved. We have a meeting in a couple of weeks and would like to hear your insights and advice. Here are the “hot button” issues as I see them: • We have a good understanding of the income and indirect tax issues surrounding the retail sale of tangible personal property as that is how we have delivered our games in the past. Are there any tax issues, both from a federal and state perspective, we need to consider as we move to an internet delivery model? Will it still be considered the sale of tangible property or would it be considered a service? Can you give us a feel for any trends you are seeing on the tax side of things for other similar products? What do you think we can...
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...that attracted some 10 million auctions in its first three years. This success provided eBay the necessary foundation to complete an initial public offering (IPO) in 1998. eBay’s online auction concept is relatively simple. Sellers register with eBay and use its suite of online tools to place nearly any item up for sale. Buyers navigate eBay’s vast array of categories or use search functionality to find goods or services that they wish to bid on. Once the auction is won, the buyer may use PayPal, the online payment service, to complete the transaction. Perhaps the most powerful part of the eBay process lies with the feedback scores that are given by both buyer and seller following the completion of the transaction. Feedback scores are public information and allow other buyers and sellers to determine whether a person is worthy of doing business with or not. A negative feedback on eBay is akin to having a bad credit score with a bank. By providing a marketplace for “new and scarce goods, end-of-life products, and used and vintage items,” eBay provides a valuable service in which they attempt to “make inefficient markets more efficient.[1]” While other Internet business models have failed in recent years, eBay’s business is thriving. In 2002, with more than 61 million registered users listing more than 638 million items at a total value of nearly $15 billion, eBay was able to surpass the $1 billion net revenue mark for the first time in its short history.[2] eBay’s mission...
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...Concepts in Federal Taxation 2011 Murphy Higgins 18th Edition Solutions Manual Click here to download immediately!!! http://www.testbankpdf.com/taxation/concepts-in-federal-taxation-2011murphy-higgins-18th-edition-solutions-manual/ ----------------------------------------------------------------------Concepts Concepts Concepts Concepts in in in in Federal Federal Federal Federal Taxation Taxation Taxation Taxation 2011 2011 2011 2011 Murphy Murphy Murphy Murphy Higgins Higgins Higgins Higgins 18th 18th 18th 18th Edition Edition Edition Edition Solutions Solutions Solutions Solutions Manual Manual Manual Manual -------------------------------------------------------------------------***THIS IS NOT THE ACTUAL BOOK. YOU ARE BUYING the Solution Manual in e-version of the following book*** Name: Concepts in Federal Taxation 2011 Author: Murphy Higgins Edition: 18th ISBN-10: 0538467924 Type: Solutions Manual - The file contains solutions and questions to all chapters and all questions. All the files are carefully checked and accuracy is ensured. - The file is either in .doc, .pdf, excel, or zipped in the package and can easily be read on PCs and Macs. - Delivery is INSTANT. You can download the files IMMEDIATELY once payment is done. If you have any questions, please feel free to contact us. Our response is the fastest. All questions will always be answered in 6 hours. This is the quality of service we are providing and we hope to be your helper. Delivery is in the next moment...
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...Tax Revenues and E-Commerce Table of Contents: i. Introduction ii. E-Commerce iii. Internet Tax Freedom Act (ITFA) iv. Amazon and “Amazon Tax” v. State Budgetary Gaps vi. Conclusion vii. Appendix a. Colorado House Bill 10-1193 b. State Budget Gaps and Uncollected Tax Revenues c. Regression Analysis i. Graph 1.1 ii. Graph 1.2 iii. Graph 1.3 viii. References Introduction It was May of 1984 in Gateshead, England when Tesco recorded the first ever-online shopping transaction from a home . Tesco is the second largest retailer in the world after Wal-Mart, based on profits . This single transaction would pave the way towards a society that relies on the virtual store as opposed to a traditional brick and mortar setting. The convenience and accessibility that the virtual market provides has consequently provided inconveniences in other areas. State and federal governments have been steadily suffering from budget short falls. E-Commerce has diverted business from the mom and pop stores to companies such as Amazon.com and Overstock.com. Small businesses have closed and the land that they once occupied now sits vacant, with no one paying the respective land and sales taxes that the business once generated. The closing of smaller, local retailers has, in retrospect, paved the way for the expansion of e-commerce and the exponential growth that has been realized over the last decade. Current legislation and lack of regulation have limited the potential for federal...
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...quality factors on internet usage The web delivery system of the taxation department ´ Jose Carlos Pinho, Maria de Lurdes Martins and Isabel Macedo School of Economics and Business, University of Minho, Braga, Portugal Abstract Purpose – This study aims to examine online service quality factors as main driving forces in the degree of intention of using the Taxation Department web site expressed by certified accountants. Design/methodology/approach – Drawing on a quantitative methodological approach, a survey was undertaken among a sample of 351 certified accountants to empirically test the proposed model. The paper used an ordered logit model to estimate the effects of several online service quality factors on the certified accountant’s degree of intention of using the Portuguese government’s tax services web site. Findings – The results identify a number of key aspects of online service quality that contribute to the increase of the use of the taxation web site by certified accountants. This is particularly evident for web site characteristics such as convenience, research facilities, privacy and security, speed and ease of access. Practical implications – This study offers the opportunity to rethink existing policies and to set forth specific measures that can be implemented to establish rigorous quality standards. Originality/value – The paper provides an empirical analysis regarding the online service quality factors that determine the degree of use of a taxation web site. The...
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...is equal to zero. Question three a. The bidding war in the car industry caused a competitive equilibrium to occur where the company manufacturing cars raised prices of the car as the demand increased. In this case demand and supply determine the price of the product. b. The law forcing yards to put a price on the cars being sold to reduce the bidding wars as the prices were already set and the car did not go to highest bidder. This meant that the supply of the car did not influence the demand of the market. c. The internet benefited the sale of cars by allowing the car producing companies to make direct connections with the customer. The internet is used to intensify the relations with trading partners. Internet is useful in advertising of the products. d. Pareto efficient situation is when there is law that instructs the yard to put prices on the cars to avoid a bidding war. In the other situation that can be said to be pareto efficient is when the internet is used for marketing making every buyer to have the same information on the products. Question four a. Total cost, average cost and marginal cost curves b. The total fixed cost will be constant as the production increases hence the curve is horizontal on the graph. The law of diminishing returns makes the total variable cost curve to slope at an accelerating rate. The average fixed cost will be developed by dividing the fixed cost by the output. Marginal cost is calculated by getting the change in total cost when output...
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...The Impact of the Internet and New Technologies on the Book Retail and Publishing Industries in the United States Jim Overman, Internet/Technical Coordinator Consortium Book Sales & Distribution St. Paul, Minnesota, USA Size of the Book Market in the United States In the year 2000, the size of the book market in the United States was approximately $25.5 thousand million. Of that figure, internet sales represented approximately 5%. Two Models of Internet Book Retaililng Since the beginning of the retail of books on the internet in the early 1990s, two primary business models have emerged: the strictly virtual bookstore and the “clicks and mortar” combination of virtual and physical stores. These models are also found in other retail ecommerce. Strictly Virtual Model The strictly virtual bookstore is a store that only exists on the internet. The best known of these stores is Amazon.com, which began selling books on the internet in 1995. The advantages of an entirely virtual bookstore include: 1) The ability to offer a wider selection of books. Large bookstore in the United States, including the chains, will often carry between 35,00-100,000. Amazon, however, carries nearly all books in print (available), approximately 2 million. 2) The ability to sell books in any location and 24 hours per day. 3) Lower operating cost. A virtual bookstore does not have to build or rent store space. Also virtual bookstore do not require as many employees. However, some of these cost savings are offset...
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...sites ensure a certain level of security in online shopping, increasing customer security but also costs for online businesses. 4.2. Economic Interest and Exchange Rates A future instability in Exchange rates would have heavy effects on eBay. Interest rates would also be affected by the instability and therefore affect eBay in bad ways. Economy Situation and trends Economic situations of course have a direct impact on eBay’s good performance. Another Wall Street crash would probably devastating effects on eBay while a second boom e-commerce would make eBay’s profit rocket. Taxation Taxation might affect eBay in two ways. First of all higher taxing of their profit might be possible. Secondly and more importantly if taxation for every sale in online auction houses would be introduced this would seriously damage eBay. 4.3. Social Lifestyle Trends Further integration of the Internet in the daily life will be a major issue in the next years. This is a great opportunity for eBay and will affect them very positively. Consumer buying patterns Consumer might develop completely different buying patterns meaning that they might start buying everything online and getting it delivered. eBay could make use of this and find new...
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