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EBay fights sales tax for Internet businesses - Bowling Green Daily News: Local

EBay fights sales tax for Internet businesses

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Posted: Monday, December 3, 2012 11:52 am | Updated: 12:06 pm, Wed Dec 10, 2014.

With talks of going over the fiscal cliff, eBay executives are hoping to stir grass roots discussions about another tax issue.

That issue is the potential for Congress to pass legislation that would allow states to require Internet-based businesses to collect and remit sales tax for purchases.

The Main Street Fairness Act would pose an undue burden on business owners, according to Brian Bieron, a director of U.S. governmental relations for eBay’s U.S. division.

Not surprisingly, the Kentucky Retail Federation takes quite the opposite position.

“We are certainly in favor of anything that levels the playing field between bricks and mortar stores and online sellers,” said Laura Leigh Goins, vice president of communications and member relations for the group.

While most of the proposals do allow an exemption for “small business,” eBay, which is a marketplace for sellers of all sizes, takes exception to what is being called a small business, according to Bieron.

Thresholds of $500,000 or $1 million in annual sales are being considered. Only those companies making more than either of those figures – depending on which legislation is approved – could be required to collect and remit sales taxes to states.

“Those numbers are far too small to protect businesses using the Internet,” Bieron said.

Bieron said those thresholds don’t follow what the federal Small Business Administration considers to be a small business.

Their definition of a small business is any company doing less than $30 million in business a year, he said.

By comparison, a single Walmart does about $90 million a year in business, he said.

Bieron speculates that as many as one-third of the retailers who would be required to collect sales tax would be what most people consider small business.

Goins said a recent survey of the group’s membership had 94 percent of them saying that they would lose in-store sales to online purchases because of the unfair advantage. Those brick and mortar stores pay taxes and otherwise invest in their local communities.

“So we absolutely support the federal fairness legislation,” Goins said.

To Bieron, Goins disputes what constitutes a small business. She said some people think even a $500,000 threshold is too high.

“We feel like any sale should be treated the same, whether it is made in a store or from a coach on a laptop,” Goins said.

Bieron said the potential layers of different local taxes that might need to be collected would be difficult and cumbersome for small businesses. But Goins said software already exists to manage such issues and would be provided for in the legislation.

In Kentucky, online sellers with a physical presence in the state already collect sales tax for sales made within the state, including from Amazon, which is embroiled in sales tax-related disputes in Western states.

“We have collected tax from Amazon for years, so we’ve proven that it can be done,” Goins said.

The retail federation estimates that Internet and catalog purchases that go untaxed cost the state more than $200 million for fiscal year 2012.

If federal legislation is approved, and that likely won’t happen during the lame duck session, it would be up to states to enact their own legislation requiring the collection. Bieron said they still want it to be on consumers’ minds.

Bryan Sunderland, vice president of public affairs for the Kentucky Chamber of Commerce, said the organization has polled its members from time to time on the subject.

“We have gotten a lot of mixed opinions,” he said. “I do know the U.S. Chamber of Commerce is considering a policy, and we will be looking at it in terms of what gets recommended by the governor’s Blue Ribbon Commission on Tax Reform.”

The commission’s next meeting is Thursday in Frankfort.

Welcome to the discussion.

7 comments:

  • posted at 2:49 am on Tue, Dec 4, 2012.

    Posts:

    Phliip, then dont use E Bay.

     
  • They Call Me Bad News posted at 11:22 pm on Mon, Dec 3, 2012.

    They Call Me Bad News Posts: 559

    Yes, there are a relative handful of shill bidders out of millions and millions of active auctions at any given moment. That only shows that most auctions don't have that problem and provide a benefit for buyers.

     
  • PhilipCohen posted at 8:29 pm on Mon, Dec 3, 2012.

    PhilipCohen Posts: 2

    eBay has never done anything for anyone but eBay ...
    And the ugly reality for consumers dealing with the eBafia/PreyPal complex ...
    “Shill Bidding Fraud on eBay: Case Study #5” ...
    http://bit.ly/N1nTlc

     
  • PhilipCohen posted at 8:28 pm on Mon, Dec 3, 2012.

    PhilipCohen Posts: 2

    eBay has never done anything for anyone but eBay ...
    And the ugly reality for consumers dealing with the eBafia/PreyPal complex ...
    “Shill Bidding Fraud on eBay: Case Study #5” ...
    http://bit.ly/N1nTlc

     
  • They Call Me Bad News posted at 7:29 pm on Mon, Dec 3, 2012.

    They Call Me Bad News Posts: 559

    It's always the ones who fail to adapt to the changing world that cry for protection. I have no sympathy for traditional retailers who refused to get with the program and lost their share of the market to the innovators.

    Shame on them for trying to stick it to the consumers.

     
  • Harvey posted at 2:53 pm on Mon, Dec 3, 2012.

    Harvey Posts: 27

    Interesting article...agreed that everyone should pay the same tax rate that is in the retail world whether it be a brick and mortar or an onlline retailer. How else can traditional retailers compete in today's marketplace unless the playing field is level for all who compete?

    Sustainability is the key to every community being successful, by supporting local businesses who can hire people locally and pay taxes back into the local economy. I realize times are tough...there are always tough times; yet we can as a community combat the economy by helping sustain local business who in turn sustain Bowling Green.

     
  • They Call Me Bad News posted at 1:31 pm on Mon, Dec 3, 2012.

    They Call Me Bad News Posts: 559

    This is crap. The aim of this legislation is to level the playing field by protecting brick and mortar businesses from online sellers who don't have to collect state sales taxes. Included in the legislation is language that allows brick and mortar businesses to sell online without having to collect sales tax.

    You have to love the wheels of justice.