Virtual PE: International Taxation and the Fairness Act

3 Pages Posted: 2 May 2013 Last revised: 15 May 2013

Date Written: April 30 1, 2013


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.

Keywords: Marketplace Fairness Act of 2013, Quill, Permanent Establishment

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., Virtual PE: International Taxation and the Fairness Act (April 30 1, 2013). U of Michigan Public Law Research Paper No. 328, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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