United States

The US government moved quickly to address the tax as well as other regulatory and legal questions raised by the global e-commerce revolution. In late 1996 and mid-1997, the US issued 2 major policy discussion papers, one covering general legal and regulatory issues and the other authored by the Treasury Department, covering in detail the tax policy implications of global e-commerce. In addition to the federal tax issues, foreign businesses selling services and digitized information to customers in the US may need to comply with state income and sales and use taxes. An important development in this area was the passage of the Internet Tax Freedom Act which limits the states' ability to implement new state sales or use taxes that discriminate against e-commerce.