Evaluating the Costs and Benefits of Taxing Internet Commerce

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Evaluating the Costs and Benefits of Taxing Internet Commerce

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Title: Evaluating the Costs and Benefits of Taxing Internet Commerce
Author: Zittrain, Jonathan L.
Citation: Austan Goolsbee & Jonathan Zittrain, 52 Nat'l Tax J. 413 (1999).
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Abstract: Current tax law--and the current technical architecture of the Internet--make it difficult to enforce sales taxes on most Internet commerce. This has generated considerable policy debate. In this paper, we analyze the costs and benefits of enforcing such taxes including revenue losses, competition with retail, externalities, distribution, and compliance costs. The results suggest that the costs of not enforcing taxes are quite modest and will remain so for several years. At the same time, compliance costs are also likely to be low as Internet infrastructure evolves to make enforcement easier, and states coordinate to harmonize their statutes. There are benefits to nurturing/subsidizing the Internet but they tend to diminish over time. When tax costs and benefits take this form, a moratorium provides a natural compromise.
Published Version: http://ntj.tax.org/wwtax/ntjrec.nsf/009a9a91c225e83d852567ed006212d8/d6450204906ce52185256afc007f12b0?OpenDocument
Other Sources: http://papers.ssrn.com.ezp-prod1.hul.harvard.edu/sol3/papers.cfm?abstract_id=174097
Terms of Use: This article is made available under the terms and conditions applicable to Open Access Policy Articles, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#OAP
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:9696321
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