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The Future of E-mail Taxation in the Wake of the Expiration of the Internet Tax Freedom Act

49 Pages Posted: 13 Nov 2013 Last revised: 1 Jun 2014

Kathryn Kisska-Schulze

Clemson University College of Business

Date Written: March 19, 2014


In March, 2013 California City Councilman Gordon Wozniak proposed the idea of imposing a tax on emails in an effort to raise revenue. In this modern era where state tax imposition efforts include the areas of e-commerce sales, telecommunication services and cloud computing, proposing to tax emails is not surprising, especially in light of the fact that the Internet Tax Freedom Act (ITFA) is set to expire on November 1, 2014. Earlier this year, the Permanent Internet Tax Freedom Act was introduced in the House of Representatives which would amend the ITFA to permanently ban taxation of Internet access. However, being that there are plenty of opponents to this new legislation, it is not unforeseeable that proposals to tax email messaging could be the wave of the future. The plausibility of taxing emails requires a thorough understanding of how email messaging works; the arguments for and against the permanent extension of the ITFA; how emails would be characterized for tax purposes; to what extent taxing jurisdictions could successfully establish nexus with email service providers or account holders; and the proper approach to sourcing emails. This article attempts to explore the evolution of state sales and use tax imposition from brick-and-mortar stores to e-commerce taxation, analyze the recent opportunities which deficit-burdened states have undertaken to impose new taxes to increase revenue; examine the possibility and plausibility of taxing emails, and offer proposals for Congressional policymakers in the wake of the expiration of the ITFA.

Keywords: tax, email, Internet Tax Freedom Act, nexus, ITFA, telecommunications, Google, Gmail, sourcing

Suggested Citation

Kisska-Schulze, Kathryn, The Future of E-mail Taxation in the Wake of the Expiration of the Internet Tax Freedom Act (March 19, 2014). American Business Law Journal, Volume 51, Issue 2, 315 - 363 (Summer 2014). Available at SSRN:

Kathryn Kisska-Schulze (Contact Author)

Clemson University College of Business ( email )

Clemson, SC 29631
United States

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