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Wed July 28 2010 08:46:54

eBay Rallies Sellers against Sales Tax Legislation

By: Ina Steiner

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Brick-and-mortar retailers are locked in a battle with online retailers over sales tax collection, and eBay is now galvanizing its base of online merchants and shoppers to influence the outcome. The online marketplace sent emails to users this week asking them to sign a petition opposing the new Main Street Fairness Act that was introduced in the U.S. House of Representatives this month.

According to eBay, HR 5660 would be extremely burdensome and costly to small online retailers, and said it was working very hard to stop the bill from becoming law.

However, retailers have always had to collect sales tax if they had a physical presence in a state with sales tax. Organizations like the Jewelers of America, a national trade association for jewelry retailers, said it welcomed the introduction of the Main Street Fairness Act, saying it would "close an Internet sales tax loophole that has hurt traditional jewelry businesses."

The Main Street Fairness Act was introduced by Massachusetts representative Bill Delahunt on July 1, who said the bill was designed to help states "retrieve billions in sales tax revenues that are owed but currently going uncollected while providing long overdue relief to Main Street businesses by restoring fairness and competition to the marketplace."

eBay's petition against the legislation that it wants its users to sign reads:

Dear Member of Congress:
As your constituent and one of the 82 million registered eBay users in the US, I'm asking you not to impose any new sales tax laws on the Internet.

The Supreme Court decided that most small businesses, like the majority of those operating on eBay, don't need to collect sales taxes from out-of-state customers. This decision was made because it would be an unfair and costly burden for small businesses to collect sales taxes for 15,000 tax jurisdictions in 45 states.

eBay sellers, like many other small business retailers, would be directly impacted by any new Internet sales tax system. It would increase the cost of doing business and shopping on-line, which would hurt sellers and buyers alike.

Please oppose any efforts to impose new tax burdens on the Internet.

Thank you for your support.
Sincerely,

Opponents of sales-tax collection legislation say that it's too complicated for online merchants and catalog companies to collect sales tax across not only the 50 states, but local jurisdictions as well. The Main Street Fairness Act has some simplification provisions, according to the summary of the bill, which can be found here.

eBay created a well funded lobbying arm, eBay Government Relations, under former CEO Meg Whitman's tenure. eBay GR runs the Main Street program that sent out this week's letter to users. You can read an interview AuctionBytes conducted with Vice-President & Deputy General Counsel for Government Relations Tod Cohen in 2006, and you can follow eBay GR on Twitter.

Where do you stand on sales tax collection?

Are small online sellers doomed with regulation and legislation, or is only fair we all play by the same rules?




Comments (72) | Permalink

Readers Comments

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Cheryl B.

Wed Jul 28 09:30:00 2010

I've always charged tax for in-state sales. While I wouldn't be excited about paying sales tax (or charging it for that matter) I understand the need for it. I don't feel that an online seller should have an advantage over and brick and mortar merchant. eBay is on the wrong side of the argument IMHO.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Rich

Wed Jul 28 10:11:04 2010

I pay all my taxes but wouldn't want my name on any sort of tax petition.  I also wouldn't trust Ebay at all and would want no part of teaming with Ebay to fight anything.  I never team with anyone you don't trust.  This sales tax proposal is another business killer; especially for the small business owner.  So it's a lose-lose.  Sign the petition and give the government your name; don't sign the petition and have less people fighting this horrible new law

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Patricia This user has validated their user name.

Wed Jul 28 10:19:29 2010

I have no doubt that a lot of buyers don't buy from sellers in the same state in order to avoid sales tax.  I know I do and I won't lie about it.  On Amazon I always look for sellers who are not in my state.  The idea of collecting sales tax for every state would put a really big hurt on online sales.  I know sooner or later greed would necessitate taxing all online sales.  Its only a matter of time....and as online sales grow they become an even bigger target for taxation.

I collect California state sales tax and it sometimes takes me longer to complete their forms then my own federal and state tax returns.  Many many counties in CA charge different tax rates and extra taxes - and each has to be noted individually!  They don't make it easy for us then wonder why we don't want to do it!!!!

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Beatrice Vaccaro
Web Site

Wed Jul 28 10:46:26 2010

I agree with the proposed legislation. Sales tax introduces a price disparity that hurts local businesses. State and local sales taxes are voted on by local voters (or indirectly by the politicians that local voters put into office). Their intent is to collect money based on purchases, and use those funds to pay for local services such as police, fire, parks etc. Now that more business occurs online, those intended revenues have rapidly dwindled. In my opinion the Main Street Fairness Act is simply modernizing the law to catch up with the reality that so much business occurs online. An argument is often made that collecting taxes for so many localities would be a huge burden for online sellers. Technology has made it easy for sellers to manage inventories, shipping, targeted marketing etc. And there are companies that have automated the sales tax collection process. Our company, Fed-Tax.net, offers such a service (called TaxCloud). It is completely free to the online retailer. It is certified to comply with the Streamlined Sales Tax Agreement, which means that TaxCloud calculates the tax due for any transaction in the US, and offers merchants advantages in terms of tax amnesty and tax indemnification from States that participate in the Streamlined Sales Tax initiative.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: mitch

Wed Jul 28 10:51:18 2010

as an ebay/Amazon seller I would not mind paying so long as on the same day the following occurs - 1st, service providers will have to do the same. all doctors, lawyers, financial reps, EVERYBODY who provides a service will have to do the same and collect/pay sales taxes - 2nd, collect sales tax on all sales of products and services by US businesses outside the US as well. 3rd - force all state and local governments to repeal all the special tax deals given to businesses in their juridstiction. If everyone is to pay fairly, no local governmennts can offer sweetheart deals to businesses for the purposes of locating an office or factory there. That is preferential treatment.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Time to Pay the Piper

Wed Jul 28 11:07:51 2010

This bill is going to pass, I have no doubts. It's about time some of you online sellers learn to play by the same rules as everyone else. You've been flying under the radar for too long.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Paranoid Poster

Wed Jul 28 11:11:28 2010

So I send it anonymously and it carries all the weight of an anonymous alleged member of a group of 82 million US users of eBay.  Or, I sign it, calling attention to myself, and having my eBay activity scrutinized by whatever agencies monitor these types of things, especially in light of this being a sales tax collection bill.  Hmmm...  Our state allows us to sell up to $2k in stuff without collecting sales tax per year.  I don't sell much more than that through eBay.  I think I'll take a pass.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: ed

Wed Jul 28 11:24:38 2010

I dont think ebay is wrong..

1. brick and mortar stores dont have shipping charges which online stores so that is a disadvantage to online stores.

2. there are millions of small businesses in the US that have their own websites,sell on ebay,amazon that are single moms,stay at home dads,retired people who cant afford to be retired,people who sell a little here and there for extra spending $$

These are people who dont make millions of dollars and dont have a staff to do things for them.

I am a stay at home dad on ebay that makes enough to pay the bills and provide for my kids...I dont make a ton of money

This bill would put me out of business as I dont have the $$$ to pay someone thousands of dollars to do my taxes as I dont make that much and how am I supposed to figure out how to send tax checks to up to 15,000 different districts each month?

This bill would put millions of people out of business

We are supposed to be adding jobs and saving jobs not getting rid of jobs.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Mark Malone

Wed Jul 28 12:27:33 2010

We collect and remit the sales tax in our state but on every single one, we get hosed since PayEnemy takes a cut of everything including the S/H/I AND any applicable sales tax.

Repeal that Feebay!

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: zztopshlf

Wed Jul 28 12:37:29 2010

Hey how about this? How about the guys in Washington like Dela-#unt stop trying to extract more money out of ''the little guys'' that they CLAIM to represent and start worrying about all the money they are spending day in and day out.

How about the DUMMIES on here supporting this ''fairness bs'' start voluntarily paying sales tax to all the states. Go ahead, you go and pay if you feel such a need!

Fairness my ass! This is just another way to hit small business people and the people who buy from them. More taxes, more levies, more bullshit!

There is no desire from these politicians to create ''fairness,'' it's all about creating another revenue stream that they can suck from like a worthless parasite.

I'm amazed to see folks on here supporting this though, I would not doubt that some are actually folks who lean towards a certain political persuasion who are here to promote a certain agenda.

No online seller in their right mind wants to have to go through all this red tape. It's certainly hard enough to earn a living as it is already.

I don't need all these states that spent like drunken sailors looking for a ''bailout'' at my expense. Screw you!

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: 618989

Wed Jul 28 14:09:15 2010

Before ebay is even mentioned I think people are living in a dream world if they don't think that taxes will eventually catch up to the web sales. Few agree with them probably, but you know what they say about the two unavoidable things?

But in the case of ebay, no way would I consider helping them one little bit, regardless of the issue.

Ebay is anti-American, anti-'little guy', anti-Mom & Pop, that is crystal clear.

For them to ask their abused 'community' for anything of such a nature is a slap in the face and a mockery.

Let them shell out the some of the money they are making off all the fakes (from certain foreign lands) to do their own lobbying.

They already spent about $6 thousand per day lobbying in Q1 of 2010. They can afford it. One small 'glitch' per day would cover that. LOL

Meg can buy elections, ebay can buy laws and lawmakers. Why do they need us? Why break a trend?

Maybe they can have their paid shills all write in with fake names? Exploit that natural, in-house talent. Maybe outsource some letter writers from BFE or Bootfookistan?

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Bulldog

Wed Jul 28 17:20:54 2010

"Ebay is anti-American"

Explain this statement. You can't just throw that out there ...

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Bulldog

Wed Jul 28 17:25:48 2010

"people are living in a dream world if they don't think that taxes will eventually catch up to the web sales"

Who said that? Collecting state/local sales tax for the nexus jurisdiction in which one operates is the norm, not only for main street businesses and online-businesses, but also mail-order catalog-based businesses. What's left to catch up, if we're all already caught up? Yes, there are dips across each business spectrum that don't participate, but doubling down on the compliant will do nothing to compel the non-compliant. The compliant already take on too much water for the non-compliant. If use tax is the issue, then states need to find some other way to collect from the *consumer*, not the business.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: joe
Web Site

Wed Jul 28 18:01:43 2010

It's coming, like or not, a national sales tax or whatever it will be.  I'll deal.  I just hope the venue (Ebay or Amazon, etc), rather than me, are the ones to collect it.  I have enough paperwork to deal with collecting for California.  Small hope, though...

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Ron

Wed Jul 28 18:55:40 2010

Up here in Canada, we charge Provincial and Federal Tax for in-province sales (roughly 13%) and 5% Federal Tax (GST) for sales out-of-province.  We only have to collect tax if we sell more than $30,000 worth of goods annually.  The advantage for the small seller is that we get credit for taxes paid on purchases.  If you are a net exporter, usually the government owes you money at the end of the year.  It's a fairly simple system and really doesn't cause a burden for a small seller.

I understand that the situation is different in the US due to more complicated tax codes.

My question is this:  If a Chinese seller is selling into the US, or any foreign seller for that matter, I assume that they would not be obliged to collect tax.  Doesn't this create an advantage for foreign sellers?  And couldn't they use US fulfillment services to avoid inflated shipping costs while still not charging tax?

Just wondering.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: elflove

Wed Jul 28 19:49:21 2010

PUH-LEAZE.

A petition is not rallying. It is just about the most ineffective means possible to combat this problem. Can anyone name a single petition that has ever worked? Adding your name to a petition is practically a waste of time. If eBay were serious about protecting their sellers, they would hire some lobbyists to go to Washington and make the case. It would be in their own financial interest to do so.

Forget the petition - if you want to kill an internet tax, there is only one way to do it: VOTE OUT THE TAX-LOVING MEMBERS OF CONGRESS AND VOTE IN ANTI-TAX CANDIDATES.

This is a pivotal election year, and it is critical that every small business owner vote for the anti-tax candidate in November. That is the **ONLY** way to stop this tax.

A petition is an utter joke.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: DieBrickandMortarDie

Wed Jul 28 19:55:50 2010

Taxing online business to protect brick and mortar is about as stupid as giving tax breaks to newspapers -- it is an effort to penalize successful, modern business models and protect antiquated, outdated business models.

If I owned, say, a pet store - I would work my tail off to get it online. The days of having a shop on the corner and assuming it will support you are over. It is time for brick and mortar stores to move into the 21st century. If they don't, I have no sympathy for them -- they are the next elevator operators: dinosaurs that will go extinct because they aren't needed any more.

I buy almost all my non-perishable goods online - it's simply cheaper to do so. Boo hoo, my local store is hurting. Big deal. The sooner they go under, the better. You can't expect these outdated business models to work forever. And it isn't government's role to subsidize them in the form of penalizing modern, 21st century businesses.

Bottom line: if state, local, and federal governments would get control of their spending, they wouldn't need to dig for tax revenue. Do you think that if they start taxing internet sales it will be enough? No! It will only enable them to spend more and keep looking for more taxes. It's time for this to end. Governments need to realize that taxation is killing this economy, not helping it.

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: Hardrock Rules

Wed Jul 28 21:38:32 2010

@DIEBRICKANDMORTARDIE: I agree with you 100%

These Brick and Mortar crybaby's have been whining forever, your right they are Antiquated, this is the 21st Century

Do they not know us online selelrs have shipping costs, eBay and website fee's payment processing fee's

With the Pay Pal IRS tax thing coming in 2011 and this Sales Tax crap, I can't help to feel as if they think us online sellers were the cause of all this recession

CUSTOMERS WANT TO SAVE MONEY BRICK AND MORTAR STORE OWNERS ! - Why do you want a level playing field of charging BIG PRICES for people, those days are gone.

Since 1995 on eBay and the Internet, consumers have gotten super savings versus you Brick and Mortar jokers. You need to adapt, have your local over priced stuff, and do online also

Here is an example, in the 1980's the most stupid little guitar amp, cost $450 locally, then eBay came along, now you get the BEST sounding, cool guitar amp at the same guitar brick and mortar star that is superior to the ones of the 1980's for $89 - Why ? Cause nobody can afford or wants the Antiquated days of getting over charged on items !

Hey I got a good one, lets go back to Horse and Buggy also, so we can save on Gas

CONSUMERS OUT THERE, YOU NEED TO SIGN THE PETITION ! These People want to get it so you eventually have to pay the OLD BIG RETAIL again, and lose savings !

Once upon a time there was a congressman I believe who wanted to charge some fee for each email people sent also, cause the post office said email was killing their stamps and snail mail

TIMES HAVE CHANGED ! And with the amount of packages shipped because of online, I think that makes up for lack of stamp sales from emails

I mean if they MUST PASS THIS SALES TAX LAW for ALL, I think  eBay has the Money and Computers so that they should collect it for each state from us sellers, and disperse it themselves, or they are going to lose even more sellers and eBay will be more dead then it already is, eBay collecting it for each state from the sale that is paid through Pay Pal, now that is SIMPLIFIED !

eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: RicRoe

Wed Jul 28 21:39:46 2010

I find eBay's methods here interesting.

In a matter they consider important to their interests they want to rally buyers and sellers to protect their position.

eBay wants buyers and sellers to listen to them and help them in their attempt to prevent this bill from becoming law. All well and good.

These are the same buyers and sellers eBay turns a deaf ear to when it comes to reversing eBay's damaging course of the past two years.

eBay is in favor of making ''noise'' when it suits them, but listening to the ''noise'' from buyers and sellers about managements many miscues is something eBay outright refuses to put on the table.



eBay Rallies Sellers against Sales Tax Legislation   eBay Rallies Sellers against Sales Tax Legislation

by: john

Wed Jul 28 22:58:05 2010

I don't want to be taxed....but I would rather be taxed than teaming with Ebay on anything. They want to burn all of us then plead for our help when it could affect their bottom lines. I think not.

Maybe the unfairness of the US government taxing Ebay sales, etc. will cause more sellers to complain and have the government look closer into Ebay's BS policies. If they did, they can tax me double.

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