Chapter%2023 - Chapter 23 Real Space and Cyberspace...

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09/26/11 Chapter 23: Real Space and Cyberspace: Jurisdiction, Taxation and International Law Issues David Baumer, 2003
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09/26/11 Jurisdiction States are limited in the ways they can raise revenue by the Commerce Clause and the Due Process Clause States must apportion taxes on multi-state businesses to their activities within the state 45 states have sales taxes on sales made to state residents Main exception was for mail order businesses who did no more than send catalogues to a state
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09/26/11 State Taxes and Web Sites As E-Commerce grew states made various attempts to get out-of-state web sites to collect taxes on in- state sales Congress passed the Internet Tax Freedom Act (ITFA) of 1998 The ITFA was passed in part because of fear of multiple taxation on E-Commerce transactions The IFTA imposed a 3-year moratorium on Internet access charges New sales taxes on out-of-state web sites Prohibition on federal taxes
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09/26/11 State Taxes and Web Sites The ITFA Moratorium was extended until November of 2003 To date there is no federal tax on E-Commerce and Congress is trying to shield the Internet from foreign taxes States have tried to impose sales taxes directly on residents Expect major changes in state taxes as states continue to struggle to balance their budgets
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09/26/11 International Law Each nation is sovereign so compliance with international law is voluntary decision Countries choose which parts of international law they want to adhere to Individual citizens and firms do not have a choice as to what parts of international law they respect They are bound by decisions made by their countries Sources of International Law Treaties and Conventions, custom, general principles of law and prior court decisions
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09/26/11 Principles of International Law Comity Countries recognize and enforce each others’ legal decrees E.g., a court in this country will not take a case that is being litigated by a foreign court Sovereign Immunity--Codified Foreign Sovereign Immunity Act , 1976 A foreign country cannot be sued in a domestic court except if The foreign country was engaged in commercial activity The foreign country waives its immunity
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09/26/11 Principles of International Law Act of State Prohibits courts in one country from legal actions taken by another country within the other country’s borders International and Regional Organizations
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This note was uploaded on 09/26/2011 for the course BUSINESS 411 taught by Professor Staff during the Spring '11 term at Youngstown State University.

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Chapter%2023 - Chapter 23 Real Space and Cyberspace...

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