Two internet retail giants find themselves at odds over an Internet sales tax bill that Congress is considering; Amazon is in favor of the tax and eBay is actively fighting against it.
The bill, that the Senate is expected to vote on this week, would allow states to tax products bought online even if the retailer’s physical location is out-of-state.
John Donahoe, eBay’s CEO, is sending emails asking all 40 million eBay users and sellers to fight the Internet sales tax bill, known as the Marketplace Fairness Act.
Amazon supports the bill, because according to Donahoe, the legislation “treats you [small businesses] and big multi-billion dollar online retailers – such as Amazon – exactly the same.”
“Amazon, for example, has fought harder than any other company to require all businesses to collect sales taxes online, while also seeking special tax benefits as it expands its warehouses throughout the country,” Donahoe writes in the email. “It’s bad tax policy. And it’s not fair.”
If Congress chooses to pass the legislation, it will affect all businesses with more than $1 million in out-of-state sales, but Donahoe argues the law should, at the very least, only affect businesses with more than $10 million in annual out-of-state sales or who have more than 50 employees.
“To put that in perspective, Amazon does more than $10 million of sales every 90 minutes,” Donahoe writes.
Amazon is not only in favor of the tax, but has been lobbying for it for years, because nine states have already mandated the giant online retailer collect sales tax.
After the internet sales tax was first introduced earlier this year, Amazon actually penned a love letter to the U.S. Senate on Valentine’s Day, showing some love to senators for proposing legislation that could end their sales-tax woes.
“I am writing to thank you for your bill, which will allow states with simplified rules to require sales tax collection by out-of-state sellers who choose to make sales to in-state buyers,” Paul Misener, Amazon’s vice-president for global public policy, said in the letter. “Amazon.com has long supported a simplified nationwide approach that is evenhandedly applied and applicable to all but the smallest volume seller.”
But eBay’s Donahoe still insists the sales tax would endanger small businesses.
“Proposed Internet Sales Tax legislation that threatens small businesses is wrongheaded and bad,” he said.
