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INTRODUCTION:

The practice of law will never be the same due to the explosive growth of commerce on the Information Superhighway or "Internet." Law depends upon geographical boundaries to define jurisdiction. Internet commerce respects no geographical bounds.
 

The Internet has transformed global commerce into one marketplace. As the legal profession enters the 21st century, it must reckon with exponential changes in technology that may nullify many existing bodies of law.
 

This course examines the tax implications of transactions between two or more parties concerning the sale of goods or services over the Internet. The course will focus on the special problems in trying to apply existing tax laws to the rapidly changing world of Internet commerce. During this course we will try to find answers to the some of the questions being asked:
 

1. Are sales and use taxes viable in a 21^st century economy?
 

2. Can state taxing authorities constitutionally assert jurisdiction over multi jurisdictional Internet businesses and require such businesses to collect sales and use taxes from interstate customers for remittance to state taxing authorities?;
 

3. Can state or international taxing authorities require that businesses conducting transactions through the Internet report and pay state income taxes or international taxes for Internet sales occurring within state or international borders even when the Internet business has no other connection with the state or country?
 

We will examine the current case law and statutes concerning mail-order and telephone-order transactions as a basis for our discussion of Internet sales transactions.
 

GENERAL INFORMATION:

You can contact me at 293-6838. If you get my voice mail, leave a number, state the reason for the call, and the best time to return your call. You can also send e-mail messages to me at cchin@wvu.edu My secretary, Tara George-Jones, is located in Room #210, and her office telephone number is 293-7776.
 

Don't hesitate to contact me with questions or comments about the course. You can drop in or make an appointment; however, it's to your advantage to schedule office appointments in advance to avoid scheduling conflicts with your classmates.
 

I cannot stress strongly enough how important it is to come and see me early in the semester if you think you need help understanding something. If you are doing the reading but still feel lost or confused, please do not wait until the last three weeks of class. I can help. But not at the last minute.
 

COURSE MATERIALS:

All course materials will be available on the Class Website: http://www.wvu.edu/~lawfac/cchin/TaxLawInCyberspace.html
 

SEATING CHART:

You will have the opportunity to choose your seat for the rest of the semester during the second class session when the seating chart will be distributed for your signatures. It may take some time for me to learn all of your names so it is important that you sit in the seat you have chosen on the seating chart.
 

ATTENDANCE:

It is your responsibility to sign the class roster when it is circulated at the beginning of each class. Please remember that the Code of Conduct is in effect when you sign the class roster and represent that you are present for class.
 

You will be ineligible to take the final exam and will be dropped from the class if you miss more than four (4) classes without legitimate excuses (e.g., emergency, personal illness or family member's illness). It is also your responsibility to keep track of your absences during the semester.
 

LATENESS:

You should be in your seat and ready to begin work when class begins. Lateness is unprofessional, disruptive, and most of all, distracting, both to other students and the professor. If you will be unavoidably detained for legitimate reasons, please let me know ahead of time, and take your assigned seat when you come in. If you are unavoidably detained because of an emergency (e.g., a traffic accident), you may also take your assigned seat. Lateness is not tolerated in the courtroom, and it will not be tolerated in this class, and will lower your class participation grade as noted below.
 

CLASS PARTICIPATION:

Active class participation constitutes an important element of the learning process in law school. Open discussion permits comparison of ideas and builds analytical skills that you must develop to become effective advocates. As a result, class participation is not only greatly encouraged, but expected. Class time is the only time that we have to work together on the course material, and works best and is far more enjoyable when as many people as possible get involved and participate on any particular day, so it is extremely important that you be prepared for class.

If no one volunteers to answer a question, I will call upon students at random.
 

Class participation will constitute 20% of your final grade, and you will be evaluated during every class on your class participation through a point system. This means that you can earn a maximum of 20 Class Participation Quality Points (Class PQPs) during every class - a maximum of 10 points for Preparedness and a maximum of 10 points for Participation Quality.
 

You can also earn Negative Class PQPs during each class that will lower your daily score - 10 points will be deducted for unexcused latenesses and a minimum of 10 points will be deducted for disruptive behavior in class. Disruptive behavior constitutes disturbing the class by acting in an offensive manner, and any other disrespectful behavior; this includes disruptive talking in class, playing computer games on laptops or displaying/reading materials unrelated to Property (i.e., on laptops), disrupting class by early departures/mid-session exits other than for interviews, for a documented health problem or for some other legitimate reason. Absences without legitimate excuses can result in a deduction of 20 Class PQPs per class. As noted above, accruing more than four absences will result in dismissal from the class and ineligibility to take the final exam
 

You have satisfied the Preparedness Requirement for each class as long as you demonstrate that you have read the assigned material and thought about its implications and have made a good faith effort to understand it; you should come to class to express reasoned views, and to ask questions about material that is unclear. You have satisfied the Participation Quality Requirement by making useful comments that enrich the class discussion. Beyond merely agreeing or disagreeing or simply expressing personal views, a useful comment reflects consideration of issues addressed in the assigned readings and in previous class discussions, offers a unique, but relevant perspective, contributes to moving the discussion and analysis forward, builds on other comments, and transcends the "I feel" response by including some evidence, reasoned logic or recognition of inherent tradeoffs or contradictions created by the doctrine. In general, it will be to your advantage to volunteer, and not to your advantage to pretend to be prepared when you are called on.

FINAL EXAMINATION:

The final examination for this course will be a group project based on the course outline, the Advisory Commission's Report to Congress (2000), and the Advisory Commission's website http://www.ecommercecommission.org/
 

The class will divide itself into approximately 5 groups, and each group will pick a topic and submit a draft of a group project proposal for my approval. The proposal must include project sub-parts assigned to each member of the group. I will work with each group to hone the proposal. Additional details about format, due dates, or other relevant concerns will be discussed in class at the appropriate time. The final examination will constitute 80% of your final grade for this course.
 

EDUCATIONAL EQUITY:

West Virginia University is committed to educational equity. WVU does not discriminate based on race, sex, age, disability, veteran status, religion, sexual orientation, color or national origin. I concur with this commitment and expect to maintain a positive learning environment based upon open communication, mutual respect, and non-discrimination.
 

Cybertax Law Course Outline

1. Introduction to the taxation of electronic commerce; overview of the Internet and e-commerce transactions.
    
   1. Explanation of terminology

   2. Overview of types of transactions and parties to the transactions

   3. Types of e-commerce systems
       

2. Foundations of "Cybertax Policy."
    
   1. Commerce Clause

   2. "Dormant Commerce Clause"

   3. Due Process Clause & Privileges and Immunities Clause

   4. Tax Policy Principles: simplification, equity, neutrality....
       

3. Sales and Use Taxation of E-Commerce
    
   1. Basic concepts of sales and use taxes; brief history

   2. Application of Sales and Use Tax doctrines to mail-order industry

   3. Exploration of the applicability of sales and use tax principles to Internet Commerce: nexus and jurisdictional issues
       

4. State Income Taxation of E-Commerce
    
   1. Multistate taxation of Web-based vendors

   2. Electronic delivery of digitized products
       

5. International Taxation of E-Commerce
    
   1. Sourcing rules for web-based income

   2. Permanent Establishments and jurisdictional issues

   3. Effect of Off-shore web servers
       

6. Anonymous transactions, privacy and the impact on tax compliance
    
   1. Digital Cash and other Digital Payment Systems

   2. Overview of anonymity issues and the Internet

   3. Tax avoidance/evasion concerns of IRS
       

7. Cybertax Policy & Congressional Action
    
   1. Congressional Action: Internet Tax Freedom Act & Advisory Commission on Electronic Commerce

   2. Examination of various proposals and positions brought before the Advisory Commission
       

8. Synopsis of Key Issues & Discussion of the Future of E-Commerce / Cybertax Policy

 
 

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