percent of all U.S. retail dollars by 2003 (Thibodeau). These staggering figures are not only a product of the United States, but have also been increasing on a global level.As Internet commerce rapidly secures its place in the world of business, so too is it stepping into the arena of international taxation. Transactions being conducted within a given jurisdiction are increasingly being conducted by e-commerce, which by nature may not easily be pinned down to a given location (Sanderson). Governments will now need to take proper action by implementing taxes on goods and services transacted over the Internet. If these government agencies fail to do so, they will lose out on potential profits due to the rising use of the Internet. Some of the problems posed by e-commerce include issues such as the residency of the taxpayer / organization and the location of the transaction. Concepts such as “permanent establishment,” ‘headquarters,” “residency,” and “place of performance of a service” are not easy to define in a world that unfolds in “virtual” terms and that is apparently free of identifiable frontiers (Gomez-Arnau). Gomez-Arnau explains how different jurisdictions will be called on to take a stand on a single transaction or activity and / or taxpayer; a situation prone to disagreement and one that may easily lead to double taxation or to an unjustifiable exemption from tax altogether. These jurisdictions in affect will need to establish a common ground for the legality of all forms of transactions to be accepted by all.Both supporters and opponents propose arguments for and against how e-commerce transactions should be handled. Transactions over the Internet should not be taxed based solely on the source of the product or by the residency of the person (James). The majority of supporters say all commercial transactions; including e-commerce should be treated equally to r...
