We live in a society in which existing legal frameworks are constantly challenged by technological advancements. This creates a need to constantly update and adapt the way in which people organize themselves in dealing with both national and international affairs. The advent of technology that enables the transmittal of voice, data, image, and video information has been called an "information superhighway,” otherwise known as the Internet. This new technology constitutes a brand-new route for the exchange of goods and services that has yet to be fully examined. Much has been written on how the Information Superhighway affects intellectual property yet substantial questions have to be answered in regards to how this new trade route will be treated by various laws of taxation. The United States Treasury Department has identified the tax ramifications of such high-technology issues as transactions over the Internet as a "top-priority" international issue. The possibilities of the Internet are just beginning to be explored, as are the tax implications of doing business over the Internet. In such a study of new frontiers of taxation practices, the nature of Internet business itself must be examined in order to appreciate how taxation will be affected. Given that the Internet is a new phenomenon, which tax professionals are just beginning to grapple with, a greater degree of detail will be employed in outlining Internet commerce as a platform for taxation.With today’s continuously expanding Internet era, there are now many issues pertaining to the way transactions are processed over the Internet. These are not only national issues, but they are now falling on a more global scale as each country follows their own set of rules and regulations. Some of these rules include how goods and services are taxed over the Internet. As a result, the question then arises as to why there is an international controversy over transac...
