John Donahoe
eBay wants users to e-mail senators asking for changes in the legislation

Online auction giant eBay is gearing up to fight the internet tax legislation currently seeking approval in Washington from going into law. The U.S. Senate is set to vote on internet tax legislation today that could institute sales tax for website purchases. Currently, the vast majority of purchases made online have no sales tax added.

Those in the Senate who support the internet sales tax bill say that they will have the 60 votes needed to move ahead with the legislation. EBay CEO John Donahoe has begun e-mailing 40 million eBay users over the weekend as part of a massive lobbying effort to defeat the sales tax legislation.

The legislation that Donahoe wants eBay users to help fight is officially known as the Marketplace Fairness Act. According to Donahoe, this act unfairly burdens small online merchants and the eBay CEO wants users to send an e-mail to members of Congress asking for changes to the legislation.

If the legislation makes it the law, it will compel some retailers to collect online sales tax on orders made from outside of their state border. Current rules and regulations require websites to collect sales tax made on purchases only if the buyers live within a state where the web service has a physical location. The physical location can be something like a warehouse or a retail store.

The legislation does reportedly have an exception for merchants that generate less than $1 million in annual revenue outside of their home state. Donahoe feels that merchants that make less than $10 million in revenue outside their state and have fewer than 50 employees should also be exempt from collecting Internet sales tax.
Below is a copy of the email in full:
Keeping costs down is a priority for any businessperson. That's especially true for people like you—successful entrepreneurs and small businesspeople who know firsthand that every penny counts. But some lawmakers and large retailers want to impose more costs on you by mandating nationwide sales tax collection for your online business, whether you sell through eBay, other marketplaces, or your own site. Are you prepared to collect sales taxes in the more than 9,600 tax jurisdictions across the U.S.? Are you prepared for the potential to be audited by out-of-state tax collectors? These burdens would be the result of proposed legislation. We are fighting on your behalf to prevent this from happening.

Over the years, I've heard repeatedly from eBay sellers like you that expanding Internet sales taxes will hurt your ability to grow, create jobs, and fuel competition that creates value for consumers. That's why for more than 15 years, our company has persistently fought efforts to expand Internet sales taxes and impose new burdens on small businesses.

The threat of Congress passing a bad Internet Sales Tax bill is real. For the first time in over a decade the U.S. Senate recently held a vote on the subject. There was support for some change to the current sales tax rules, but all the details need to be worked out. And make no mistake; the current bills penalize small online businesses. 

This legislation treats you and big multi-billion dollar online retailers—such as Amazon—exactly the same. Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer. It may harm your ability to grow, and costs jobs, including yours. And if small businesses like yours can't succeed and grow, that undermines competition, consumer choice, and low prices. Amazon, for example, has fought harder than any other company to require all businesses to collect sales taxesonline, while also seeking special tax benefits as it expands its warehouses throughout the country. It's bad tax policy. And it's not fair. 

Proposed Internet Sales Tax legislation that threatens small businesses is wrongheaded and bad. But we can fight this together. The solution is simple: if Congress passes online sales tax legislation, we believe small businesses with less than 50 employees, or less than $10 million in annual out-of-state sales, should be exempt from the burden of collecting sales taxes nationwide. To put that in perspective, Amazon does more than $10 million in sales every 90 minutes. So we believe this is a reasonable exemption to protect businesses like yours from unreasonable tax burdens. That's what we're fighting for, and what big companies such as Amazon are fighting against. 

Please join me and let your Members of Congress know they should protect small online businesses, not potentially put them out of business. Click here to make your voice heard. Your elected representatives will appreciate hearing from you. 


John Donahoe
President and CEO
eBay Inc.

Source: Reuters

“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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