American University, Kogod School of Business, hosts a symposium today on The Taxation of the Digital Economy. Robert Stack, Assistant Deputy Secretary for International Tax at the U.S. Treasury Department, will deliver the keynote address.

Panel 1: Cross-Border Taxation Considerations for the Digital Economy The digital economy often involves the massive use of personal data and multi-sided business models. This can often lead to difficulties in quantifying costs and benefits generated by free products and user created intangibles including the determination of where value creation occurs. Defining a permanent establishment in the context of the digital economy has been difficult since companies often do not require a physical presence in a jurisdiction in order to conduct business. This panel will discuss the tax issues faced by the broader digital economy, proposals currently under consideration by the OECD, and planning considerations in light of the OECD report.

Panel 2: U.S. State and Local Tax Policy and Practical Considerations for the Digital Economy Internet sales of tangible personal property raise questions about the applicability of sales or use taxes and about the power of states to impose tax-related obligations on sellers. Of particular importance in the context of state sales and use taxes is the power of states to require sellers from outside the state to collect sales taxes, even though the seller has no physical presence in that state. As online shopping for goods and services grows in popularity, the pressing need for uniform guidance grows. This panel will discuss approaches being used by states today to deal with these issues and the current proposals on the table to ensure uniformity in the laws among the states.

Panel 3: Taxation of Cloud Computing Providers and Customers Advancements in technology, such as the advent of cloud computing, have revolutionized how companies conduct business globally and have paved the way for a new economy, the digital economy. As the digital economy continues to grow, a growing megatrend involving the convergence of the technology sector with other industries is visible. This convergence has allowed for the transformation of age-old business models to fit into the modern area. However, with such rapid changes in business, the current tax rules are often inadequate in providing clear guidance for both direct and indirect tax matters. For cloud service providers and cloud users, questions loom over basic issues regarding payment characterization and sourcing, withholding taxes, permanent establishment, value added taxes, sales and use taxes and transfer pricing. Moreover, policymakers in many countries have expressed concerns about opportunities for base erosion and profit shifting (BEPS). This panel will discuss the cloud computing tax issues faced by multinational businesses and the variations in policies, recommendations that have been put forth by various nations and the OECD and how global companies may likely respond.

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