Virtual PE: International Taxation and the Fairness Act

Document Type

Article

Publication Date

2013

Abstract

Congress may be about to enact the Marketplace Fairness Act of 2013, which overrules the Supreme Court's 1992 decision in Quill that banned states from requiring remote vendors to collect use tax on their behalf unless the vendor had a physical presence in the state. This paper explores the international tax implications of such a move given that the Permanent Establishment threshold is similar to the physical presence requirement that the Fairness Act seeks to abolish. It argues that the small business exception in the Fairness Act is a good model for international tax to follow in re-evaluating the PE threshold.

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