For taxable interstate transactions, the concept of destination-based sourcing
has not caused significant controversy; most states and businesses recognize the practicality of sourcing
sales and collecting tax based on the situs of the purchaser or where the purchased items ultimately will be used.
in situations that might permit transmutation of source by a U.
This article describes how present interpretations of the sourcing
rules for conventional commerce should apply to electronic transactions.
The Legislative History of Section 865 Supports Symmetrical Sourcing
of Gains and Losses.
Based on the determination that the guarantee fees, although analogous to interest for sourcing
purposes, were not in fact for the use or forbearance of money, the FSA concluded that such fees were not "treated as" interest for treaty purposes.
865, Congress intended to modify the general "title passage" rule, with the goal of preventing the easy manipulation of sourcing
the income from domestic to foreign source.