Internet Sales Pose International Tax Challenges

The Internet is raising new problems in federal, state, and local taxation. Broadly speaking, the Internet is a "network of networks" linking millions of computers around the world through telephone and other lines of communication. Commercial use of the Internet has grown rapidly. One recent estimate placed the value of Internet transactions at $200 million,² and claims have been made that this figure could grow geometrically. Presently, a computer user with a modem and appropriate software can browse what has become known as the "world wide web" and order goods from on-line catalogs that are accessed through "home pages" located on servers connected to the web. A user can also order and take delivery of software and certain services, transfer funds, and even carry on two-way vocal communications over the Internet. Commercial purveyors on the Internet often build redundancy into their hardware platforms by having not only one server, but also at least one other "mirror" server