eBay Main Street recently asked Brian Bieron, Senior Director, Federal Government Relations and Global Public Policy to discuss the latest in Remote Sales Taxes. Here is the transcript from our conversation.
In short, summarize the debate happening on Capitol Hill around H.R. 5660. Why is eBay opposed to it?
eBay is opposed to changes in tax laws that would undermine small business retailers that use the Internet.
The debate over sales tax collection by remote retailers has been going on for decades and has been focused on Internet retail for years. This bill is the latest in a long line of bills proposing to expand sales tax collection on Internet commerce, and it is the most anti-small business measure to date. Past bills have recognized that small business retailers are different than large retailers and should therefore face different tax collection burdens. In the past, this recognition was made with a “Small Business Exemption” of $5 million in “remote” sales, meaning that the new tax collection burdens would not impact small retail businesses selling less than $5 million.
The new bill, H.R. 5660, rejects that idea and has no small business exemption. Instead, it proposes a “Small Seller Exception,” (note the omission of the words “small business”) and gives the authority to set the threshold to the tax collectors from the states involved in the coalition pushing for new sales tax collection. That group rejects the $5 million number as being too large.
eBay, on the other hand, believes that the U.S. Small Business Administration should set the threshold. Needless to say, eBay disagrees with those proposing a new sales tax collection on the Internet and whether small businesses and retailers should be burdened with this.
What has happened since the bill was introduced in July? What is the general feeling in the House towards the bill currently?
The bill was introduced and garnered a few cosponsors. Shortly thereafter, House Resolution (H. Res.) 1570 was introduced in the House of Representatives calling for small business retailers to be exempted from any new Internet tax burdens. H. Res. 1570 had bipartisan support, which we think is a positive sign. Neither bill has been considered by a congressional committee at this point.
In terms of real activity, it is worth noting that large retailers and their trade groups have been very active in lobbying government officials in recent months, calling for legislation to expand sales tax collection in a way that would clearly harm small business retailers.
On the other side, eBay has worked to help Internet-enabled small retailers and consumers express their views on the issue. We are pleased that tens of thousands of users share the view that new tax burdens on e-commerce is not a good idea, especially when it is done in a way that undermines small business.
What will happen next and what is the timeline for the House to take action?
While some are concerned that Congress could take up legislation – including H.R. 5660 – after November elections, it’s not very likely. Instead, I think everyone is looking to 2011. The larger retailers and those who want to expand Internet taxes are clearly lobbying in Washington and in states with an eye on legislation next year, and here at eBay, is we are also focused on raising awareness about Internet sales taxes as very anti-small business, anti-entrepreneurship and anti-jobs.
What is eBay doing to ensure that online retailers are protected?
We will continue our efforts to provide a voice for small business retailers on the Internet so that lawmakers understand the important role they play in the economy. We will also continue our efforts to ensure that small business retailers on the Internet are not undermined by poor government tax policies. Lastly, we’ll continue to provide information and resources for Internet users and small online retailers. The more we connect and share with each other, the greater impact we can have on potential bills like H.R. 5660.