It remains unclear how tax policy will be applied to electronic commerce. What is clear is that governments have always been able to base their tax structures on the concepts of physical assets, geographic locations and face-to-face encounters. In the world of electronic commerce, these concepts are much less relevant. In fact, a single transaction can cross many geographic boundaries instantaneously. The fact that there are hundreds of thousands of local taxing jurisdictions potentially involved in a Global Electronic Commerce transaction presents some unique problems. First, a lack of coordination among various jurisdictions could result in multiple taxation as several authorities try to exert jurisdiction over a single transaction. Second, some tax authorities may decide to target Global Electronic Commerce for special, new taxes. These types of taxes effectively penalize the company or consumer that chooses to use networks and information technology to conduct business. To help Global Electronic Commerce grow, governments worldwide should coordinate their policies, refrain from imposing new or discriminatory taxes and strive for "tax neutrality" – an assurance that electronic transactions are treated no differently than paper-based transactions.

Increasingly, the Net is where business must be. With a first class Web site, any business of any size can challenge entrenched franchises and brands, anywhere in the world.
Louis V. Gerstner, Jr., IBM Corporation