The tax will apply if any party to the transaction is based in a participating member state, regardless of where the transaction takes place - the so-called "residence principle" - and it is this provision that is causing the most controversy.
Freed Maxick, an accounting firm in northern New York stateparticipating in Twitter's test, says the ads it bought on Twitter last fall targeting people looking for U.S. presidential candidates' views on taxes generated 2.1 million clicks on its website.