Webwork - 7:05 pm on Mar 22, 2009 (gmt 0)

Emerging idiocracy.

You incorporate in "tax haven" State, in order that the corporation is "a resident" of Tax Haven, USA.

But then your run into rules/laws that favor viewing corporate "residence" as existing in at least 2 places - to deal with Tax Haven, USA's "business grab". The 2 places are 1) State of incorporation; and, 2) principal place of business, i.e., corporate HQ or manufacturing HQ, etc.

So, you have a "virtual business"? Where's that "other place"?

So you host your servers in Tax Haven, USA.

Is that enough? Don't you create your content and manage your site from TaxBurden, USA?

Alright, so now you outsource your content generation. You go even further than the USA. You outsource to Elbonia on the Asian continent.

But, who will attempt to grab and tax your revenue then? Will Elbonia make a grab? For sure.

What about a site that allows for UGC - user generated content - and monetizes that "product" - the UGC?

Well, you have users in all 50 States AND around the world.

Maybe that provides a nexus for taxation in all 50 states?

Emerging idiocracy. You can see where this is going. Patchwork legislation. First to grab, all to follow. Me, me, me too!

Emerging idiocracy. There will be pain. Probably only remedied by federal FEDERAL legislation and that will like conflict with State's rights and . . well . .

There will be pain.