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BEPS and the Digital Economy

Posted on August 12, 2015 by Christopher J. Worek

 

Christopher J. Worek received his JD from the University of Illinois College of Law in 2015.

This article was selected as a winning entry in Tax Analysts' annual student writing competition. It was originally written for a class taught by professor Richard L. Kaplan.


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In 2013 the largest U.S.-based companies stockpiled $206 billion of profits offshore; Microsoft Corp., Apple Inc., and IBM Corp. contributed $37.5 billion.1 More shocking statistics indicate that 307 multinational enterprises amassed roughly $1.95 trillion in the same year.2 Generally, tax planning seems to be one step ahead of policy and administration, but digital advances allow MNEs to be multiple steps (and years) ahead of the tax rules they must follow.

If the almost 74,000 pages of the U.S. federal tax code3 fail to provide a system to capture Apple's profits shifted to Ireland or Amazon.com Inc.'s profits shifted to Europe, can a compilation of tax codes from 44 countries used by the OECD Committee on Fiscal Affairs solve that problem?

Section I of this article describes the rise of the digital economy and offers two hypothetical digital economy business models. Section II details the OECD's action 1 proposals to counteract base erosion and profit-shifting concerns in the digital economy, and Section III analyzes those proposals. Section IV offers two recommendations to rectify the BEPS digital economy concerns. Section V concludes.


I. Background


A. The Internet and the Digital Economy

The global digital business practices that consumers view as customary have far outpaced the international tax standards designed to ensure equality and promote global enforceability. Decades ago, the traditional approach required MNEs to establish a physical presence of manufacturing, marketing, and distribution -- that is, a subsidiary -- to expand into a particular jurisdiction and manage that MNE's business there. According to the OECD, that now-outdated structure existed because of numerous, and also outdated, factors: customs duties, currency exchange rules, slow communications, and high transportation costs. Today, those same nonresident MNEs can expand their operations without a physical presence because of advances in information technology.

Further, IT has facilitated international expansion of small and midsize companies, allowing them to become micro-multinational companies. IT has also eliminated many impediments to efficient expansions of MNEs, including currency and customs barriers. It is the recent increase in the volume of digital products, however, that has moved MNEs and consumers into a digital economy, the action 1 report says.

The digital economy has encouraged the transformation of business models, expanded market reach while lowering costs, changed how products and services are produced and delivered, and added payment options through new and existing platforms.4 Bricks-and-mortar businesses have become online retailers that provide consumers not only with goods and services, such as online insurance brokerage and financial services, streaming content, and online education, but also with the benefit of never having to leave home to receive them.

The OECD has said that business model shift, a result of liberalized trade policy and reduced transportation costs, has resulted in global value chains for many MNEs. IT has provided the resources for those transforming models, improving the relationship between businesses and their customers -- personal computing devices expand consumers' access to what the OECD has called the "Internet of things" and accelerate commoditization, thereby facilitating the sales of intangible goods and services. Businesses are now afforded an expanded use of consumer data based on voluntarily provided information, observed behaviors, or inferred desires, thus allowing them to customize consumer website experiences and tailor products and services to individual customers accordingly.

Those tailored products and services result in e-commerce. In a business-to-business model, wholesalers are able to purchase goods online and resell them to customers. Those businesses, many of which operate under a single e-commerce platform -- that is, one website -- can also provide logistic supporting services to distributors, retailers, and resellers by offering content and order management.5

The digital economy has also facilitated the business-to-consumer model by expanding the online sale of tangible and intangible goods and the associated payment services, which require consumers simply to input their credit card information to complete a transaction. App stores have emerged, providing an array of products to consumers.

Mobile applications exemplify the many challenges facing digital economy taxation: They are produced by developers around the globe, are freely downloadable by customers (many of whom are unidentifiable) in other countries, and are potentially used by those customers in countries other than those where the apps were downloaded. Tax issues arise in identifying customers, the value-adding development stages, and where the app was downloaded and used.

Action 1 says BEPS issues arise in the digital economy not only because of multi-sided business models involving entities in different jurisdictions but also because of the expanding synergistic benefits caused by the mobility of intangible products and the increase in users, data, and business functions such as product research and development. Mobility has become a hallmark of reducing tax in the market, intermediate, and ultimate resident countries. For instance, companies are able to establish a wholly owned subsidiary in the market country -- potentially using only a warehouse (possibly to store products sold online) -- that can be used to maximize deductions or realize little taxable profits to escape tax in the market country.

Similarly, the ultimate parent country may lose its jurisdiction to tax profits when a business contractually allocates risk and ownership of intangibles to low-tax jurisdictions, usually through below-value transfers of those intangibles. Below are two examples -- the first of an online retailer and the second of an Internet app store -- showing BEPS in the digital economy, both of which are built on examples in the action 1 report.

B. Examples of Digital Economy BEPS

 

1. Selling Something Down the River

Consider the first hypothetical: Euphrates is a corporation located in Country X engaging in the online sale of physical goods and digital products. Consumers worldwide visit Euphrates's websites and order physical goods for delivery or digital goods that are downloaded directly to the consumers' computers. Through consumer interaction on Euphrates's websites, Euphrates is able to gather online data regarding the consumers' experience and thereafter use that information to provide personalized recommendations and advertisements geared toward particular consumer interests.

 

In X, Euphrates operates the websites, performs all R&D, offers managerial services to lower-tier subsidiaries in exchange for management fees, and owns all intangibles used in operating the websites and fulfilling orders in X. Euphrates, however, also sells future and existing intangibles used in other regions to Euphrates-Sub (ES), a subsidiary resident in Y (a country with preferential tax treatment for income earned from specific intangibles), in exchange for a buy-in payment. ES in turn sublicenses the "purchased" intangibles to wholly owned subsidiaries (ES2s), which operate their regional websites in exchange for royalties.

The various ES2s handle all consumer contact outside X, process customer orders and payments, and have legal title to all products sold online in their respective regions, but they have no contact in the market jurisdictions to which they sell. ES2's subsidiary (ES3), located in Country Z, the market jurisdiction, is the only entity there with a permanent establishment. It operates warehouses and fulfills orders through courier delivery.

The direct tax consequences are straightforward:

  • Z taxes the minimum amount of income allocated to ES3, but none earned by ES2 because it escapes Z's domestic jurisdiction or because its taxation in Z is prevented by tax treaties;
  • Y taxes ES's profits at the preferential rate for intangibles and ES2's profits from its online sale activities, which are almost entirely offset both by royalty payments to ES for the rights to use the intangibles to operate regional websites and by management fees paid to Euphrates; and
  • X taxes Euphrates on profits derived there, including the buy-in payment and annual cost-sharing payments.


There are significant difficulties in enforcing the payment of VAT on Euphrates's suppliers of digital products to consumers in various market jurisdictions. The supplier is not a resident of Z, and enforcing compliance by self-reporting resident consumers as well as self-registering or -remitting nonresident suppliers is futile.

2. Apples and Oranges

The second hypothetical features Orange, a corporation located in Country A that supports a widely used Internet app store. Orange conducts all R&D services associated with the operating system of its devices and the Internet app store (and provides those services to its subsidiary) but sells to subsidiary OJ, resident in the favorable tax jurisdiction of Country B, the technological rights to developing and running the app store as well as a servicing contract for the app store.

OJ owns the servers (also located in B) that host the app store and conducts all transaction processing and contracts for the purchase of applications. In larger local markets such as Country C, OJ has established local subsidiaries to assist with marketing and promotion. The local subsidiaries are never formally involved in the sale of any applications and are paid a service fee that covers their expenses, plus a markup. OJ is entitled to all residual profits after compensating other members of the corporation for their functions.

The direct tax issues of C are analogous to those of Z in the first hypothetical. B can apply its corporate tax to OJ but at a more favorable rate than that of A or C. A is able to tax profits from Orange's sale of technology to OJ and the R&D services it provides to its subsidiaries; that taxable income may be severely limited by Orange's perceived low value of intangibles and tax credits.

VAT enforcement concerns arise for the apps sold to consumers not located in B (presumably, Orange's entire consumer base). If the supplies are subject to VAT in the final consumers' countries and not in B, consumers may be able to acquire the applications either VAT free or at a lower VAT rate than if purchased domestically (in B).


II. The OECD Proposal


A. Methods and Measures for Implementation

The OECD's solutions focus on the key features in the hypotheticals: the importance and mobility of intangibles and their consequences on direct tax; user mobility and its effect on VAT; and infrastructure responsible for conducting sales established at a distance from the market jurisdiction. The methods used for achieving the OECD deliverables on the digital economy center on increased transparency between taxpayers and tax administrations, as well as on more accurate risk assessment measures. Two proposed measures for simplifying enforceability include mandatory disclosure of tax planning arrangements and transfer pricing documentation, and a template for country-by-country reporting.

To achieve the digital economy deliverable in accordance with enforcement simplification measures, portions of other deliverables should be read in conjunction with BEPS action 1, namely:

  • action 6 (prevention of treaty abuse), which seeks to curtail tax treaty benefits, thus giving market countries the ability to enforce their domestic laws without being constrained by treaty provisions initially established to prevent double taxation;
  • action 7 (prevention of the artificial avoidance of PE status), to be issued September 2015; and
  • action 8 (intangibles).


The goals are to address tax avoidance and restore taxation to both the market and ultimate parent country.

B. Direct and Consumption Tax Options

 

1. Modifications to PE Exceptions

Action 7 on preventing the artificial avoidance of PE status proposes modifying the PE exceptions so that a company's essential business activities in a given market country are unable to benefit from those exceptions, thus not allowing circumvention of the domestic tax laws.

 

The exceptions to the definition of PE are in article 5(4) of the OECD model tax convention and are the subject of four proposals:

  • eliminate paragraph 4 entirely;
  • eliminate paragraph 4, subparagraphs (a) through (d);
  • condition the availability of the exceptions in paragraph 4, subparagraphs (a) through (d) on the activity conducted being preparatory or auxiliary in nature, rather than a core activity; or
  • eliminate the word "delivery" from paragraph 4, subparagraphs (a) and (b).


The OECD has proposed removing or altering those exceptions because activities that may have been auxiliary in character are now significant components of a company's digital economy business.

2. Nexus Based on Significant Digital Presence

A different proposal would establish an alternative nexus when a company engages in business activities conducted wholly digitally. The alternate nexus test indicates that any company engaged in specific fully dematerialized digital activities could be deemed to have a taxable presence in another country if it maintained a significant digital presence in that country's economy.

The significant digital presence part of the test acts as a threshold that if exceeded, indicates a substantial ongoing interaction with the market country's economy, thus establishing a PE in that country. The OECD's Task Force on the Digital Economy (TFDE) has attempted to produce potential elements for the fully dematerialized digital activities part of the test, which targets companies that require minimal physical elements in the market jurisdiction for the performance of their core activities, regardless of the presence of any physical elements for secondary functions (for example, offices, buildings, and personnel).

3. Replacing PE With Significant Presence

The TFDE has recommended eliminating the concept of PE altogether and replacing it with a significant presence test that continues to use the concept of physical presence but targets the digital economy's evolving customer relationships and focuses on each entity's contribution to value, including:

4. Withholding Tax on Digital Transactions and Bit Tax

  • relationships with customers or users over six months, combined with some physical presence in the country, directly or via a dependent agent;
  • sale of goods or services by means involving a close relationship with customers in the country, including:
    • through a website in the local language;
    • offering delivery from suppliers in the jurisdiction;
    • using banking and other facilities from suppliers in the country; or
    • offering goods or services sourced from suppliers in the country; or
  • supplying goods or services to customers in the country resulting from or involving systematic data gathering or contributions of content from persons in the country.

The OECD has also proposed a withholding tax and a "bit" tax. The first could be imposed either directly on payments for particular digital goods or services to some foreign provider, or on the financial institution involved with those payments to avoid the hassle of requiring individual customers to pay. That proposal is an alternative to remedying the physical presence requirements under the PE definition, which allows companies to conduct substantial economic activities in other countries while avoiding the tax.

The "bit" tax would potentially apply if a company's website exceeded a minimum threshold of annual bandwidth usage, measured by the number of bytes expended.

5. Consumption Tax Options

There are also two consumption tax options available for counteracting digital economy issues: lowering the VAT exemption threshold for low-value imports and encouraging countries to simplify their registration mechanisms when accounting for VAT -- specifically, for remotely delivered services and intangibles -- and requiring them to make the mechanisms clear and accessible by using third-party intermediaries to assist with compliance.

C. Intangibles and CFCs

 


Other proposals seek to address concerns raised by the use of intangibles in the digital economy and the controlled foreign corporation rules as they pertain to the digital economy. Intangibles produce both income and value in the digital economy, but they also exacerbate the BEPS digital economy problem because they are easily transferable (sometimes at below-market value) to entities of an MNE located in advantageous tax regimes -- a process facilitated by licensing arrangements and cost contribution arrangements.6 Action 8 on intangibles is intended to determine proper valuation and ensure that transfers of hidden intangibles are not used to shift income. Accordingly, CFC rules worldwide must be revised so that income earned from the (remote) sale of digital products and services is subject to tax under all tax administrations.

 

In short, many proposals are directed at rectifying the BEPS problems raised by the digital economy, but is any one a potential solution? Which proposals are viable candidates for reform? And, most importantly, which proposals include forward-looking components that seek to disentangle the evolving digital economy problems that may develop for years to come?


III. Proposed BEPS Solutions


A. Task Force Evaluation Principles

In evaluating the aforementioned options, the TFDE considered the following principles to determine if a valid framework exists: neutrality, efficiency, certainty and simplicity, effectiveness and fairness, and flexibility.

B. Analyzing Direct and Consumption Tax Options

 

1. Modifications to PE Exceptions

Beginning with the four potential modifications to the PE exceptions, the only proposed modification without significant flaws is option (1), the complete removal of article 5(4); the remaining three proposals are cosmetic options that do not result in any meaningful change to the PE exceptions. The commentary on article 5(4) of the OECD model tax convention helps show the superficial nature of those options, saying the common feature of the paragraph 4 activities is that they generally are preparatory or auxiliary activities. That notion is made explicit in subparagraph (e), which acts as the catchall provision of paragraph 4, and when taken together with all subparagraphs, prevents taxation on "activities of a purely preparatory or auxiliary character."

 

The commentary indicates that preparatory and auxiliary activities are determined by "whether or not the activity of the fixed place of business in itself forms an essential and significant part of the activity of the enterprise as a whole," judged case by case on the facts. Determining auxiliary activities on the basis of whether they are essential and significant is far from profound, and the deficiencies of that test give companies the opportunity to argue that an activity is not essential and significant, making it auxiliary by default.

Option (2), eliminating subparagraphs (a) through (d), fails to truly change the exceptions from PE status because subparagraph (e), which contains the "any other activity of a preparatory or auxiliary character" catchall, is still in place.

Option (3), qualifying subparagraphs (a) through (d) to apply only to activities preparatory or auxiliary in nature, is essentially the current rule and merely moves language from the commentary to the rule itself.

Option (4), eliminating the word "delivery" from subparagraphs (a) through (b), appears to target concerns raised by online retailers with large delivery operations. It fails, however, to consider the potential reactionary moves by those companies -- namely, hiring an independent, third-party operator or transporter that conducts the delivery operations. Further, while companies such as Amazon may be affected (albeit slightly), does eliminating the word "delivery" remedy issues raised by Apple (or Orange, in the example above)? Does Apple deliver apps via its app store, or do customers "pull" the apps from Apple's storage servers? Proposed solutions should not raise more issues.

Option (1) does not contain those shortcomings, nor is it merely cosmetic. If it is implemented, a PE would include all activities of an enterprise, both core (essential and significant) and preparatory and auxiliary. This option might be too broad and might not satisfy fairness and neutrality standards to include all activities as satisfying PE status because some companies could be at a bigger disadvantage than others, but it would certainly simplify the system and could strengthen enforceability. Another potential flaw with this option is that while it attempts to address issues raised by the digital economy, it could go beyond its intended scope and infringe on businesses conducting activities not at issue under action 1.

2. Nexus Based on Significant Digital Presence

Establishing alternative nexus using a two-part test for companies engaging in wholly digital business is a solution that targets solely the digital economy; however, some of the same issues that exist in modifying the exceptions to PE arise here. The first part of the test, identifying a significant digital presence, is a threshold, but the proposed examples for determining whether the threshold is exceeded are objective and vague: a "significant number of contracts," digital goods "widely used or consumed," "substantial payments," and "strongly related to the core business."

A more definitive test might consist of varying percentage thresholds, potentially based on the size of the company, for specific activities (sales, payments, marketing, and so forth). Further, the fourth example given -- a branch that "offers secondary functions . . . that are strongly related to the core business" -- contains the same nondescriptive, mutually exclusive problem as attempting to determine core versus auxiliary activities based on whether they are essential and significant: What is auxiliary or secondary? And more importantly, what is core?

The second part of the test offers more objective bases for determining fully dematerialized digital activities, including that no physical elements or activities are involved in creating goods or services, payments are made solely with credit cards, and websites are the only means used to enter into a relationship.

That part of the test establishes a simple, efficient, and neutral way to determine if those digital activities exist, but the downside might be the lack of flexibility arising from the absolute nature of those elements. For instance, if companies allow customer payment via check by mail or telephone orders, they might escape tax obligations. Despite that drawback, the test provides a solid foundation for tackling BEPS digital economy issues.

3. Replacing PE With Significant Presence

Implementing a significant presence test in lieu of the conventional PE requires multiple considerations in the digital economy discussion. All three parts of the test rely in part on the relationship between the company and the consumer, an often ignored but potentially strong way to solve BEPS digital economy issues. Companies open warehouses and distribution centers in various market countries because proximity to the consumers facilitates the sale and delivery of goods and services.

By first requiring some form of relationship between companies and consumers, the test presents an alternate way to identify the significant digital activities occurring in market jurisdictions. Similar to the significant digital presence test, this option targets digital activities (for example, website sales and consumer data collection that affect supply needs) but only when customers maintain a relationship of a somewhat continuous nature. Other benefits of this approach include potential administrative efficiencies (depending on both the definition of and the test for customer relationship) and forward-looking flexibility because companies will always be engaging customers to sell their goods and services.

The practical nature of this test might also be its largest weakness. There is no proposed method for objectively determining whether a close customer relationship exists or even what generally constitutes a relationship. Implementing another subjective, case-by-case test is bound to harm numerous companies and violate the fairness prong, a crucial selling point for a proposal set to be voted on by the 44 countries of the OECD Committee on Fiscal Affairs.

4. Withholding Tax on Digital Transactions and Bit Tax

Compliance is often difficult when requiring the involvement of consumers or third-party financial institutions to rectify a tax problem. Consumers, if compelled to comply by a penalty or some other measure, would pay a higher cost for goods or services and would thus be motivated to cut back on purchases to avoid the tax. The same concerns are present when involving third-party financial institutions: Without a penalty for noncompliance, there is no way to ensure those companies will comply with withholding tax requirements. Further, financial institutions might seek to insulate themselves from the tax by forbidding their customers from engaging in transactions the withholding tax could apply to.

Meanwhile, a bit tax ignores multiple tax administration principles, including neutrality, simplification, effectiveness, and flexibility. How would the tax be adapted when purchases 20 years from now are not completed over the Internet but through a revolutionary interconnected system? Also, have we reached the point where we finally decide to tax the Internet, the medium through which so many individuals have been able to achieve the American Dream?

The tax would be progressive, with a minimum threshold, and would have exceptions for companies of a particular size and turnover. The bottom line is that the potential modification and elimination of PE status exceptions was a step in the right direction, so adding a tax with additional exceptions is surely a step backward.

5. Consumption Tax Options

Both consumption tax options either fail to address issues raised by the digital economy without hindering nondigital businesses (option 1) or rely too heavily on the compliance of independent national tax administrations to modify their VAT registration mechanisms (option 2).

C. Analyzing Intangibles and CFCs

 


Intangibles are unquestionably a crucial component of the digital economy, and their freely transferable nature requires that mechanisms be established to avoid below-value transfers to reap the rewards of advantageous tax regimes. While avoiding below-market-value transfers might be an important first step, it does not address online retailers that deliver products worldwide without a significant taxable presence or app stores that sell fully digitalized products to an undefined number of customers. The starting point for CFC rule revision suffers from the same shortcomings as the second consumption tax option -- namely, too much reliance on individual, national tax administrations to revise the treatment of income earned from the sale of digital goods or products.

 


IV. Recommendations


A. Eliminate the Exceptions

This recommendation follows the first proposal made by the TFDE -- namely, eliminate article 5(4) of the model treaty, which references the exceptions to PE status. Of foremost importance, eliminating those exceptions indicates that all activities of an enterprise, both core and preparatory or auxiliary, will be in the definition of PE.

Unlike the other three cosmetic proposals for the PE exceptions, this option aligns with many of the TFDE's evaluation principles:

  • it is a solution that not only simplifies the rule, but also streamlines enforceability and application by avoiding the distinction between core and preparatory or auxiliary;
  • its simplicity actually enhances future flexibility because a broad definition of PE will encompass many future business models and market structures; and
  • it applies the rule fairly and neutrally to all companies.


The aforementioned disadvantages that the proposal is too broad and extends beyond the digital economy are certainly ancillary when compared with the broad issues of the digital economy. While the proposal could infringe on nondigital companies, given the consumer-driven digital surge in the economy, it is not a misconception that all companies will soon be digitally intertwined.

B. Creating a New Nexus

 


A second recommendation would combine and modify two TFDE proposals. The basis for this recommendation is the two-part test for alternative nexus based on significant digital presence, with the factors for the significant digital presence prong arising from the current example, as well as from the examples given for the test in action 1 to replace PE with significant presence.

 

The fully dematerialized digital activities prong would be modified. Below is a version of the significant digital presence test that eliminates subjective, vague qualifiers such as "significant," "widely," and "substantial" and adds objective numeric thresholds:

  • Any company maintaining a significant digital presence in the economy of another country will be deemed to have a taxable presence in that country if it is engaged in specific fully dematerialized digital activities.
    • A significant digital presence is established if most of the following factors are met:
      • X percent of a company's qualified sale of goods or services are to customers in Country Y. A sale is qualified if it is through a website in the local language, offers delivery from suppliers in the jurisdiction, uses banking and other facilities from suppliers in the country, or offers goods or services sourced from suppliers in the country.
      • Digital goods or services of the enterprise account for X percent of the digital goods or services used or consumed in Country Y.
      • Substantial payments are made from clients in Country Y to the enterprise in connection with contractual obligations arising from the provision of digital goods or services.
      • An existing branch of the enterprise in Country Y offers marketing or consulting functions targeted at clients residing in Country Y.
      • The enterprise supplies goods or services to customers in Country Y resulting from or involving systematic data gathering or contributions of content from persons in the country.
    • Fully dematerialized digital activities include any of the following:
      • X percent of an enterprise's business is derived from digital goods or services.
      • Over X percent of sale contracts with customers are concluded via the Internet or telephone.
      • Payments are made through credit cards or other means of electronic payment using online forms or platforms linked or integrated with the relevant websites, or through the mail.
      • X percent of a company's profits are attributable to the provision of digital goods or services.
      • Websites account for X percent of the relationships (sales) entered into between consumers and the company.
      • The actual use of the digital good or the performance of the digital service does not require physical presence or the involvement of a physical product other than a computer, mobile device, or other IT tools.

This proposal lacks specific values because of a lack of information, but those values can be readily inserted when an appropriate threshold is determined.

By eliminating subjective language and replacing it with objective percentage thresholds, this test attempts to satisfy all the TFDE's principles for tax administration. First, specifying a percentage level of activities is neutral and fair in its application across companies. It also provides a simple and objective test that would apply as the digital economy continues to evolve -- that is, it is flexible. It also provides additional certainty to the taxpaying companies regarding when they will be subject to tax: based on their percentage levels in comparison with the thresholds.


V. Conclusion


Digital economy issues are not unique to the United States and its companies. In fact, 90 percent of Internet users in the United Kingdom and Germany shop online, compared with only 70 percent of U.S. Internet users and 50 percent of Internet users in OECD countries, up from less than one-third in 2007.7

All signs point to the continued explosion of the digital economy. Every day has become Cyber Monday, and unless something is done to rein in the digital economy and place it under a simple, flexible, and efficient international tax standard, Cyber Mondays will become Black Mondays.


FOOTNOTES


1 Richard Rubin, "Cash Abroad Rises $206 Billion as Apple to IBM Avoid Tax," Bloomberg, Mar. 12, 2014, available at http://www.bloomberg.com/news/2014-03-12/cash-abroad-rises-206-billion-as-apple-to-ibm-avoid-tax.html.

2Id.

3 "How Many Pages Long Is the U.S. Income Tax Code in 2013?" Townhall, Feb. 17, 2013, available at http://finance.townhall.com/columnists/politicalcalculations/2013/02/17/how-many-pages-long-is-the-us-income-tax-code-in-2013-n1514277.

4 Andrew Wyckoff, "Today is Cyber Monday. And so is tomorrow and the next day and the next . . .," OECD Insights (Dec. 1, 2014), available at http://oecdinsights.org/2014/12/01/today-is-cyber-monday-and-so-is-tomorrow-and-the-next-day-and-the-next/.

5 Oracle, "Reinventing the Web Channel to Maximize B2B Sales and Customer Satisfaction," white paper (Mar. 2011), at 7, available at http://www.oracle.com/us/products/applications/atg/b2b-ecommerce-reinventing-333314.pdf.

6See Section I.B.2 (discussing direct tax options).

7Supra note 4.


END OF FOOTNOTES