Wake Forest Journal of Business and Intellectual Property Law V. 25

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25 Wake Forest J. Bus. & Intell. Prop. L. 1 (2024-2025)

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WAKE FOREST JOURNAL OF BUSINESS

& INTELLECTUAL PROPERTY LAW

VOLUME 25 FALL 2024 NUMBER 1

TAXING THE DIGITAL ECONOMY

Stephen T. Blackt

I. INTRODUCTION ............................................................. 3
II. HOW WE GOT HERE .......................................................5
A. A HISTORY OF INTERNATIONAL TAXATION OF
D IGITAL THINGS....................................................... . 6
1 . B E P S ....................................................................... . 6
2. D igital Services Taxes ............................................ 9
3. India's Response ........................................................10
4. Grounds for Jurisdiction: Residency and Source ......11
B. HISTORY OF MULTISTATE TAXATION OF DIGITAL
T H IN G S ..................................................................... . 14
1. Among the United States............................................14
2. History of the Internet Tax Freedom Act...................16
C. THE COMPLETE AUTO FACTORS FOR THE US ............. 19
1. Complete Auto ...........................................................19
2. Does this Apply to International Tax?.................. 20
D. SOUTH DAKOTA V. WAYFAIR, INC ........................ 23
E . SITUS OF D ATA ....................................................... . 24
III. TAXING THE DIGITAL ECONOMY...........................25
A. WE HAVE ARGUED ALL THIS BEFORE .......................... 28
1. Taxpayer as Seller ................................................ . 28
2. Taxpayer as Licensor............................................ . 31
3. Taxpayer as Service Provider............................... 33
B. WHAT ABOUT MY CITIZENS? ................................... 34
1. Certainty v. Sovereignty....................................... . 34
2. Will there always be competition?......................... 37
3. The Tax Base.............................................................. 40
C. PROBLEMS WITH TAXING DIGITAL THINGS ................ 46

i Professor of Law, Texas Tech University School of Law; LL.M. Taxation,
University of Washington School of Law (2000); J.D., J. Reuben Clark School of Law,
Brigham Young University (1994); B.S., Brigham Young University (1988). The
author gratefully acknowledges the financial support of the Texas Tech University
School of Law for this Article and the excellent research assistance of Ashley
Williams.