eBay Asks Users To Petition Against Marketplace Fairness Act

Posted Apr 22, 2013

eBay has asked their 40 million users to petition against a legislation that would allow states to collect sales tax from out-of-state online retailers.  eBay CEO John Donahoe sent out an e-mail about it on Sunday morning.  The legislation is known as the Marketplace Fairness Act and eBay believes that it would affect small entrepreneurs.

The Senate may be voting on the Marketplace Fairness Act this week and would apply to businesses that generate over $1 million in out-of-state revenues.  Donahoe believes that the threshold should be increased to businesses that have $10 million in revenues or over 50 employees.

eBay’s largest rival, Amazon.com, actually supports the bill according to the Wall Street Journal.  The National Retail Federation believes that this would help states generate around $24 billion in annual income.

Below is the e-mail that eBay sent out about the Marketplace Fairness Act:

Subject: Help Us Stop Congress from Imposing New Tax Burdens on You

Dear [eBay user’s name],

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 US? 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 recentlyheld 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 smallonline 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 taxes online,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 of 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.