Sales and Use Tax Issues of Internet Transactions

Training Provided by Lorman Education Services nAs federal funds available for state governments are reduced, many states are taking aggressive positions in an attempt to impose sales and use tax obligations on interstate transactions. Internet sellers face a murky and sometimes ill-defined landscape with respect to sales and use taxes that are impacted by both state law and federal constitutional principles. This teleconference will help Internet businesses to better understand their sales and use tax obligations and ensure compliance. It will explain the constitutional requirements that must be satisfied in order for a state to impose sales or use tax obligations. It will examine the critical substantial nexus requirement and clarifies the contours of that requirement through a discussion of existing and developing case law. It will explore how Internet vendors can, without careful planning and analysis, establish nexus through either related on unrelated third parties. Finally, this teleconference will explore proposed legislative changes that may effect the taxation of Internet transactions in the future.

Sales and Use Tax Issues of Internet Transactions Agenda

1. Overview - Nexus, the Threshold Requirement for State Taxation of Internet Businesses
2. Constitutional Limitations on States' Power to Tax Interstate Commerce, i.e., Internet Transactions
1. The Due Process Clause Requires a Definite Link or Minimum Connection - Physical Presence Not Needed
2. The Commerce Clause - Over a 100-Year Journey From No Taxation to the Permissible Taxation of Interstate Commerce
3. The Modern Commerce Clause's Four-Pronged Test and the Substantial Nexus Requirement - Physical Presence Required
3. Substantial Nexus and the Commerce Clause
1. Physical Presence Is Constitutionally Required
2. How Much Physical Presence - The Cutting Edge Issue
3. The Relationship Between the Physical Presence and the Activity Being Taxed
4. Nexus-Establishing Presence for Internet Vendors
4. The Next Layer - Establishing Nexus Through Others and the Developing Case Law
1. Alter Ego Nexus
2. Affiliate Nexus
3. Agency Nexus
5. Future Food for Thought - A Look Around the Corner
1. The Internet Tax Freedom Act Moratorium
2. The Streamlined Sales Tax Project and Amnesty
3. The Simplified Sales and Use Tax Act (Would Require Collection by Remote Vendors for States That Are a Part of the Streamlined Sales Tax Project)
4. Business Activity Tax Simplification Act (Would Update P.l. 86-272 to Apply to All Products and Services and Other Business Activity Taxes, Would Apply a Physical Presence Test)

About The Training Provider: Lorman Education Services

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