EBay is pushing its users to petition the US House of Representatives over what it calls “unfair Internet sales tax legislation.” This campaign is, of course, in regards to the Marketplace Fairness Act, which has already been approved by the Senate.
In case you’re unfamiliar with the Marketplace Fairness Act, it requires online retailers to collect sales tax on every purchase, paid to the state where the user is located. In other words, shoppers accustomed to not paying sales tax on their online purchases may soon be required to do so.
For, or Against?
In an email signed by CEO John Donahoe, eBay warns its users that this bill “creates an unfair tax burden for small online businesses.” eBay claims “big retailers and state tax collectors” are looking to burden “small businesses that use the Internet to grow.”
Supporters of this bill believe it will level the playing field for local (offline) businesses. Those against the bill, like FreedomWorks president Matt Kibbe, claim it “undermines state sovereignty and allows for taxation without representation.”
eBay undoubtedly has financial incentives in this fight, but it’s noteworthy that many supporters of the Marketplace Fairness Act have money in the game as well. MarketplaceFairness.org, for example, is actually run by TaxCloud (owned by FedTax), a company which provides sales tax services for online retailers.
In its petition, eBay is asking Congress to “support small businesses” by modifying the current bill to “exempt small businesses with less than 50 employees or less than $10 million in out-of-state sales.” It’s noteworthy that, according to the Huffington Post, businesses which generate less than $1 million in out-of-state revenue are already exempt from this law.
A similar Internet sales tax bill failed to pass in 2012, and at the time we warned that such a bill appeared all but inevitable in 2013. We have reached out to eBay in regards to this campaign and will update this post when we hear back.
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