As Congress reviews a bill that would allow states to collect sales tax from online retailers, Amazon and eBay are split on the legislation.
eBay opposed the "Main Street Fairness Act," which was introduced into Congress on Friday, saying it would result in unnecessary costs for small-business owners. Amazon favors the bill, noting it would simplify tax collection.
According to news reports, the bill would allow states to require large online and mail-order retailers to collect sales tax if the states sign the Streamlined Sales and Use Tax Agreement. This would simplify tax collection by requiring states to adopt the same requirements for sales tax returns and by administering state and local sales tax collection through one office.
The bill would exempt small online retailers from having to collect sales tax. However, the threshold of what would be considered a "small" online business has not been defined in the bill, according to news reports.
Forcing small businesses to take on the same costs and tax burden as national retailers is unrealistic
Currently, online retailers only have to collect sales tax if they have a physical presence in a state where they make sales, and they pay the various sales tax rates, depending on their tax jurisdiction.
The idea of uniformity appeals to Amazon, notes Paul Misener, Amazon's vice president of global public policy.
"Amazon.com has long supported a simple nationwide system of state and local sales tax collection, evenhandedly applied to all sellers, no matter their business model, location or level of remote sales," Misener wrote in a letter to Sen. Dick Durbin (D-Ill.), one of the legislators who introduced the bill.
eBay, which has been vocal about its opposition to online sales taxes, opposed the bill, saying it could hurt small online-business owners, like its eBay sellers.
"Forcing small businesses to take on the same costs and tax burden as national retail businesses is unrealistic, unfair and will unbalance the playing field between giant retailers and small business retailers on the Internet," says Brian Bieron, eBay's senior director for federal government relations and global public policy.
The National Retail Federation and the International Council of Shopping also support the legislation. The Electronics Retailing Association and the National Taxpayers Union oppose it.
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Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.