Home      Login

Abstract: 

Electronic commerce—conducted through the Internet and through a vast array of private dedicated computer networks—provides an inexpensive communication, display, and delivery system that can open new markets for both old and new businesses, with considerable potential benefits to society. Strangely enough, these important improvements have brought unexpected problems for state and local taxation and endangered the viability of the general sales tax as a major contributor to the finances of state and local governments, in part because state revenue policy and administration continues to assume an economic world of immobile largeproducers of manufactured goods. In general, state and local government finance and the legal environment in which it must function have not caught up with economic and technological change, and the development of e-commerce is one of those changes.

Keywords: Sales taxation in state and local government; use taxes; the remote vendor problem; physical presence

Affiliations:  1:  Indiana University.