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E-Commerce Tax Alert From CCH
Provides Vital Guidance For "Dot Com" Companies
(RIVERWOODS, ILL., April 10, 2000)
Businesses rushing to cash in on the cutting-edge rewards of e-commerce could find
themselves tripped up by the mundane realities of taxes, according to CCH INCORPORATED
(CCH), a leading provider of tax and business law information. To help companies dodge
potential tax land mines as they seek success in cyberspace, CCH is offering E-Commerce
Tax Alert, an essential planning tool for anyone doing business on the web. The Alert
is a monthly newsletter available over the Internet via the CCH Internet Tax Research
NetWork. ($397. To order or for more information, contact your CCH sales
representative at 888 CCH REPS, call 800-449-8114, or visit http://tax.cchgroup.com.)
Misconceptions about the taxation of electronic commerce
are almost as plentiful as the number of firms venturing into electronic selling and
delivery of products. In fact, an alarming number of cyberspace entrepreneurs believe that
the much talked-about Internet Tax Freedom Act makes all e-commerce transactions tax-free.
In fact, the Act prevents states from enacting new tax laws aimed at the Internet, but
doesnt touch existing law.
"States could be very busy in just enforcing existing
rules over the next few years without pursuing new and novel theories of nexus relating to
e-business," stated Richard J. Prem, a partner in the E-business Tax Services Group
of Deloitte & Touche LLP, in the first issue of the E-Commerce Tax Alert. Prem
is a member of the E-Commerce Tax Alert editorial advisory board
Some companies havent even registered to collect
sales tax, under the mistaken impression that because their businesses operate over the
Internet theyre exempt, even from tax on sales in their home state. Such companies
can forget floating lucrative IPOs until they come into compliance if they are not
assessed out of business first.
Turning Clicks into Bricks
As the first issue of E-Commerce Tax Alert points
out, companies may try to shield the electronic side of their businesses from state
taxation, only to fall into some of the classic nexus traps that have plagued traditional
Using a parent companys call center, for example,
creates nexus in the state where the call center is located. Similarly, a "dot
com" business may assume bricks-and-mortar presence and may be taxed
accordingly if its customers can obtain warranty or repair services for products at
the facilities of a parent or affiliate company. Feature articles in the Alert
bring these and other pitfalls to readers attention and, each month, explore
significant and emerging issues such as audit requirements for electronic records or the
new role of VAT in the U.S. marketplace.
In addition to timely articles, each monthly issue of E-Commerce
Tax Alert contains important state law updates, notices of related conferences and
helpful charts, such as the one in the premiere issue summarizing the taxability of
downloaded software in the various states.
Editorial Board Assures Provides Insight, Answers
Guiding the newsletter and contributing to it is a
distinguished editorial board whose members are active practitioners on the frontiers of
e-commerce. With their day-to-day involvement with taxation of e-commerce, board members
assure the relevance and timeliness of the Alerts contents.
The board members are:
- Katrina Doerfler, Senior Manager, State and Local Taxes,
Cisco Systems Inc.
- Stephanie Lipinski Galland, Director, External Tax
Relations, Gap Inc.
- Jeanne P. Goulet, Director of Taxes, Software and
E-business Solutions, IBM Corp.
- Karl A. Frieden, Partner, State & Local Tax
Services, Arthur Andersen LLP
- Richard J. Prem, Partner, E-business Tax Services Group,
Deloitte & Touche LLP
- Terrence P. Ryan, Director, State & Local Taxes,
Members of the board will also respond to questions from
their fellow tax managers in the newsletter. Readers merely have to click a button on the Alert
homepage to pose their question.
Availability and Pricing
To order or for more information, contact your CCH sales
representative at 888 CCH REPS, call 800-449-8114, or visit http://tax.cchgroup.com. A one-year subscription to E-Commerce Tax Alert
on the CCH Tax Research NetWork is $397.
About CCH INCORPORATED
CCH INCORPORATED, headquartered in Riverwoods, Ill.,
was founded in 1913 and has served four generations of business professionals and their
clients. The company produces more than 700 electronic and print products for the tax,
legal, securities, insurance, human resources, health care and small business markets. CCH
is a wholly owned subsidiary of Wolters Kluwer U.S. The CCH web site can be accessed at www.cch.com. The CCH Federal and State Tax web
site can be accessed at http://tax.cchgroup.com.
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