Document Type

Article

Publication Date

8-2024

Abstract

In a previous column, I argued that digital services taxes should be creditable as in-lieu-of taxes under section 903. A new analysis by Jane Gravelle sheds further light on this topic but does not change the outcome.

Gravelle makes three arguments against the creditability of DSTs. First, she argues that the whole concept underlying both pillar 1 and DSTs (allocating value to market jurisdictions) is wrong, and therefore they cannot be justified. Second, she argues that DSTs are passed on in full to consumers and that this precludes creditability. Finally, she argues that DSTs are discriminatory excise taxes on U.S. corporations and that this justifies denial of creditability. All these arguments are misguided.

Available for download on Saturday, August 26, 2034


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