The 2012 U.S. of eBay Fly-In event wrapped up today with highly successful meetings on Capitol Hill.  eBay Sellers from across the country met with many of their members of Congress in both the House and Senate.  As expected, members of Congress were very welcoming to their constituents and receptive to working on the current issues affecting small businesses, primarily Internet sales tax.

The day included a lunch at the Charlie Palmer Steakhouse featuring Sam Graves (R-MO), Chairman of the Small Business Committee (and avid eBay seller).  Congressman Graves shares our concerns about protecting small businesses in America and helping them thrive.

Policy Highlights

Internet sales tax remains a hot topic on Capitol Hill and was discussed in every meeting.  Many nuances of the issue – rarely covered by the mainstream media – were discussed by eBay sellers, including:

• Big retailers have an inherent advantage over small businesses in that they can negotiate tax rates, shipping rates and favorable cost of goods, which reinforces the notion that this debate is really about large vs. small retailers, and NOT online vs. offline retailers.
• With over 9,000 tax jurisdictions and 45 different tax filing procedures across the country, any Internet sales tax without a robust small business exemption will create an unfair burden that large “big box” retailers won’t face.
• With taxation comes the possibility of tax audits. For small businesses, being audited by one or more out-of-state tax authorities could be extremely time consuming and costly.
• An artificially low exemption rate could force some small businesses to actively stop growing, reduce tax revenue in the business’s home state, and make it harder to hire new employees.
• Revenue may not be the best basis for a tax exemption, as it doesn’t correlate to profit, number of employees, or volume of transactions. Current bills in Congress have much lower proposed exemption levels than previous bills and are far lower than small business definitions from the Small Business Administration (SBA).
• For an online retailer with a physical location in only one state, paying taxes to other states is unfair because they do not receive any of the benefits of having a business in that state, such as schools, police and other services.
• Many goods sold on eBay are second-hand and have already been taxed once – should they be taxed over and over?

All of the eBay sellers at this event did a tremendous job telling their unique success stories and illustrating the many challenges faced by small businesses today.  But putting a face to ecommerce, they paved the way for ongoing discussions with members of Congress.  We would like to sincerely thank all of the eBay Sellers who took time out of their busy schedules to attend this important event.  The 2012 U.S. of eBay Fly-In was a great success and we’re already looking forward to future events!