eBay and Amazon used to have one thing in common – they both opposed legislation requiring online sellers be forced to collect state sales tax even if they had no physical presence in those states. Amazon switched positions as it began building warehouses across the country and negotiating with state governments for tax breaks.
eBay, meanwhile, remains staunchly opposed to such legislation (as it stood – see clarification below), as it frequently reminds sellers who are members of its Main Street grassroots program.
The legislation is dubbed the Marketplace Fairness Act, but many people wondered about states that have no sales tax. eBay raised that issue in a recent blog post:
New Hampshire news outlet, The Keene Sentinel, recently published an editorial that argued the Marketplace Fairness Act would be unfair to New Hampshire because the state does not have a sales tax and would gain nothing by forcing its businesses to collect for other states. As currently written, the Marketplace Fairness Act would force businesses to collect and remit sales taxes to over 9,600 taxing jurisdictions nationwide. This new sales tax mandate would be burdensome to any small business in any state, but it is particularly unfair to businesses located in states that have made it state law to not collect sales taxes.
Proponents of the bill began running an ad in the fall that played on nationalistic emotions. “Thanks to the online sales tax loophole this Chinese company will decimate our local retailers. Unless Congress ends special tax treatment for Alibaba and other online giants, Main Street will never look the same,” the ad stated, according to The Hill.
Just because Congress couldn’t pass the bill last year doesn’t mean it’s dead. Politicoexplains that Rep. Bob Goodlatte (R-Va.) will work on a House version of the bill this year, and said Rep. Jason Chaffetz (R-Utah) has been working on separate legislation to address concerns of the impact small businesses. His legislation could be released in early 2015, the publication reported.
Clarification 1/6/15: eBay spokesperson Amanda Miller clarified eBay has never been opposed to Internet sales tax. “We are advocating for small businesses,” she said. She pointed to an editorial written by eBay CEO John Donahoe published in the Wall Street Journal in 2013 in which he discussed the role small businesses play in economic growth.
The Marketplace Fairness Act would require small businesses to track and comply with the tax laws of more than 9,600 tax jurisdictions across the U.S. “Our advocacy was for them,” Miller said.