salesandusetaxplan.docVIP

Sales and Use Tax Plan Creation of the Multistate Tax Service November 11,1999 Submitted by: David E. HardestyMarkle Stuckey Hardesty Bott101 Larkspur Landing Circle, Suite 200Larkspur, CA 94939 415-925-1120 Ext 104 ~ FAX 415-925-1140 david@ About David Hardesty: David Hardesty is a CPA, and a vice president of Markle Stuckey Hardesty Bott, CPAs. He is a specialist in the taxation of electronic commerce, and the author of Electronic Commerce: Taxation and Planning (Warren Gorham Lamont, 1999), which is the only comprehensive authority on the taxation of e-commerce. He also writes the weekly email newsletter, E-Commerce Tax News. He is an adjunct professor at Golden Gate Universitys Graduate School of Taxation, where he teaches a course on the taxation of e-commerce. David received his BA in accounting and MBA in taxation from Golden Gate University. Prior to joining Markle Stuckey Hardesty Bott David worked for Grant Thornton International and Deloitte and Touche.Contents: I. Executive Summary II. Detailed explanation of plan III. Application of 18 criteria set by the Advisory Commission on Electronic Commerce Executive Summary Currently, vendors without physical presence in a state are not required to collect use tax on sales to customers in that state. However, the ability of remote vendors to avoid collection of tax cannot last forever. The current system, where a significant amount of use tax on remote sales goes uncollected, is untenable. State and local governments are losing tax revenues to which they have legitimate claim; and bricks and mortar vendors, which must collect sales tax, are at a competitive disadvantage to remote vendors that do not. The Supreme Court upheld the physical presence rule in 1992, but also held that Congress has the power to create a legislative solution in this area. If Congress does not act, the Court may revisit this issue. A court-ordered plan, rather than a well thought out legislative solution, could su