Congressional Democrats Introduce Amazon-Supported Online Sales Tax Bill

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ADOTAS – With Amazon and Sears Roebuck offering big thumbs up, Democrats in the U.S. House and Senate unveiled versions of the “Main Street Fairness Act,” which would provide states with a framework for collecting sales tax on online purchases. eBay was joined by Electronics Retailing Association, the Computer and Communications Industry Association, TechNet and the National Taxpayers Union in booing the legislation.

Senators Dick Durbin (D-IL), Tim Johnson (D-SD) and Sen. Jack Reed (D-RI) cosponsored the bill in the Sentate while Reps. John Conyers (D-MI), Peter Welch (D-VT) and Heath Schuler (D-NC) did the same in the House.

“In 2012, states across the country, including Illinois, are expected to lose as much as $24 billion in uncollected state and local taxes on Internet and catalogue sales,” Durbin commented in a statement. “From 2005 to 2010 the state of Illinois estimated it lost $153 million each year. The Main Street Fairness Act doesn’t ask anyone to pay a single penny more in taxes. Instead, it would help governors and mayors collect taxes that are already owed.”

Amazon, which is fighting California legislation and shut down its 10,000 or so affiliates in protest, has commented before they believe the sales tax framework should be built on a federal level. Last week at the company’s second-quarter earnings call, CFO Thomas J. Szkutak said, “We support a federal simplified approach, as we have for more than 10 years.”

Paul Misener, Amazon vice president for global public policy, wrote a letter to Durbin giving Amazon’s support, suggesting that the Supreme Court views Congress as the “appropriate forum to resolve the issue.”

eBay’s Brian Bieron, senior director of federal government relations and global public policy, didn’t mince words: “A collection of state tax commissioners have again been able to get an outdated Internet sales tax bill introduced in Congress, but we are confident that it will be rejected because it would harm small Internet retailers…. Forcing small businesses to take on the same costs and tax burdens as national retail businesses is unrealistic, unfair and will unbalance the playing field between giant retailers and small business retailers on the Internet,”

eBay instead has put its support behind House Resolution 95 by Reps. Dan Lungren (R-CA) and Zoe Lofgren (D-CA), which allows Congress to deny states the right to impose “unfair tax collecting requirements on small online businesses.”

2 COMMENTS

  1. The simple solution is TaxCloud (http://taxcloud.net).

    The statements by Ebay and others who falsely claim to defend small business confuse me. My company currently uses a PayPal checkout button (PayPal is an Ebay subsidiary) that works with TaxCloud’s service so my business (with less than $50k in annual sales) already calculates, collects and remits sales tax for any jurisdiction in any state. It is simpler in most cases for my business to calculate and remit sales tax than to deal with shipping.

    Now my business no longer pays to frustrate accountants with the current antiquated filing requirements and burdensome administrative costs. In reality, by signing up for TaxCloud my business has found new profits through streamlining administrative functions and is able to compete in any state without the fear of Nexus legislation and simultaneously saves my customers from burdensome filing requirements while providing much needed revenue supporting the local budget items I have voted to support.

    So lets recap: After voluntarily enabling my business to calculate, collect and remit sales tax legally due greater efficiency, savings, and new markets result.

    If my business can manage to collect the legally due sales tax for my customers, why is it so hard for Ebay?

    Technology available freely on the internet (such as TaxCloud) is more than capable of handling sales tax calculation and remittance. Sorry everyone, the “too burdensome” argument carried merit in 1967 and in 1992 (when SCOTUS last ruled on this matter), but in the era of modern computing where Ebay and a few others maintains a dominant position, multijurisdictional sales tax calculation and remittance is easily accomplished.

    So what is the real reason Ebay chooses to evade supporting your

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