We told you this morning that a proposal to give states the authority to collect sales tax from out-of-state online retailers won approval from the U.S. Senate.
However, the Marketplace Fairness Act must still navigate the Republican-controlled U.S. House – where many lawmakers have signed anti-tax increase pledges – and also faces strong opposition from eBay, Inc. Other major retailers with e-commerce operations, such as Amazon, Wal-Mart and Target, support the measure.
San Jose-based eBay’s opposition to the bill centers on what the company claims is an unfair tax burden for small vendors. Under the measure, states would expand tax collection to companies that are doing online sales, even if they don’t have a physical presence. Retailers must have $1 million or more annually in out-of-state online and other remote sales to be eligible for taxation.
“A lot more work needs to be done to get the Internet sales tax issue right,” said Brian Bieron, eBay’s senior director of global public policy, in a statement after the Senate vote. “eBay will continue to focus on bringing greater balance to the legislation by protecting small businesses with less than $10 million in sales or fewer than 50 employees.”
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EBay has spent nearly $482,000 on federal lobbying during 2013, including the Marketplace Fairness Act, on top of $1.5 million spent on lobbying efforts last year that also encompassed the same measure.
California passed a law in 2011 allowing the state to collect more taxes from online sales. The measure before Congress now would do more to facilitate multistate taxing, instead of only requiring retailers to collect taxes in the states where they have physical operations.
As the nonpartisan Center for Responsive Politics points out, the measure in unlikely to have a big impact on retailers with major online sales operations, like Amazon. That’s because the companies already pay taxes in many states where they have warehouses, distribution centers or other brick and mortar facilities.
Amazon has spent more than $856,000 on federal lobbying efforts so far in 2013, including the online sales tax bill. The company also lobbied on the measure in 2012, when a total of $2.5 million was spent on federal lobbying.
Date: May 7, 2013