Taxing Internet Sales.Keep it simple: That's the chief recommendation stemming from a recent survey of CFOs and corporate tax directors asked about emerging policy on taxing transactions made over the Internet. A moratorium A suspension of activity or an authorized period of delay or waiting. A moratorium is sometimes agreed upon by the interested parties, or it may be authorized or imposed by operation of law. on Internet-related taxes is currently in place through October 2001, and Congress could extend that to 2006, as recommended by an advisory commission that met earlier this year. But to get a sense of the corporate attitude toward Web-related taxes, KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen surveyed 270 GFOs and tax directors in five industries: banking and finance, manufacturing, retail, telecommunications and transportation. Asked about their top priority for any national tax policy toward the Web, 40 percent of the respondents mentioned a consistent, simplified e-commerce tax policy, 31 percent cited an extension of the moratorium, and 24 percent argued for a permanent ban on Internet taxes Before these efforts could gain much headway, however, the United States Congress preempted virtually all conceivable forms of Internet taxation. The purpose of the 1998 Internet Tax Freedom Act was to nip in the bud these incipient taxation efforts. . The spiraling growth of e-commerce has prompted many executives to question how their companies could properly administer taxes on Internet sales, KPMG found. Two-thirds said it would be difficult to administer; one in four said it would be "very difficult." Executives in transportation, telecommunications and banking and finance expressed the most concern. Looking at global e-commerce, more respondents said they were worried about tax issues (31 percent) than with the challenges of bridging cultural differences (19%). Impact of Internet Taxation 57% Plays a role in where e-business applications are located 47% Has called into question tax department's understanding of best applications 47% Helps determine how e-businesses are structured 39% Move to e-business will complicate com·pli·cate tr. & intr.v. com·pli·cat·ed, com·pli·cat·ing, com·pli·cates 1. To make or become complex or perplexing. 2. To twist or become twisted together. adj. 1. tax issues Source: KPMG How the CFO See Chief Financial Officer. Role Will Change The Most in the Next 5 Years * Greater role in technology and information systems initiatives 39% * Strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. 26% * Increased interaction with other departments 16% * Expanded leadership and management role 14% * Other/don't know 5% Source: RHI RHI Robert Half International RHI Range Height Indicator RHI Roller Hockey International RHI Relativistic Heavy Ion RHI Rigid Hull Inflatable Boat RHI Rhinelander, WI, USA - Rhinelander Oneida County Airport (Airport Code) Management Resources, based on survey of 1,400 CFOs |
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