We’ve been in the “digital economy” for some time, yet it continues to evolve with new business activities and ways of living. And, we see “old economy” businesses, like Ford Motor, move more into the new economy.
I define the digital economy from the perspective of how people and businesses engage in it:
• Transacting business with virtual currencies, such as Bitcoin;
• Providing digital goods and services; and
• Transacting business enhanced by the Internet, such as finding customers, including working in the “sharing economy.”
There are numerous federal, state and local tax issues with these transactions usually due to the fact that existing tax rules were not written with these new ways of doing business in mind.
I’ve got an article in CCH’s Journal of Tax Practice and Procedure (May-June 2015) on “Taxation and Today’s Digital Economy,” with more details as to the issues. It also includes a due diligence worksheet that hopefully tax practitioners will find useful.
What do you think? Any additional issues or due diligence tips?
Original Post By: Annette Nellen