Jon Goldberg and David Haugrud, owners of International Marketing Systems in Fargo, North Dakota, recently expressed their concern with the Internet sales tax bill that was passed in the Senate last May.  Goldberg and Haugrud operate an online store on eBay called Outdoor Bunker, which sells outdoor recreation equipment.  The Marketplace Fairness Act, currently pending in the House, would mandate that all small businesses selling over $1million in sales per year to essentially become tax collectors for every sales tax jurisdiction across the country. 

"One of my main concerns is the cost it will have for us to collect sales tax from essentially every state in the union," Goldberg said.  In addition, Goldberg explained that the so-called small business exemption is very deceptive because some small businesses may deal in large dollar ammounts, but collect little in revenue.

Goldberg and Haugrud also explained that the way the legislation is currently written, the law would favor overseas businesses over American small businesses just trying to stay afloat.  If passed, the bill would dramatically increase costs for their business because of the complexity involved in collecting taxes and addressing audits they may face from taxing entities.  Since forcing overseas businesses to collect state sales tax would be a violation of International trade law, Goldberg and Haugrud expressed frustration that domestic sellers would be at a disadvantage because the law would not apply to other countries, including China.

Read Goldberg and Haugrud’s opinions on the Marketplace Fairness Act.  For more information on eBay Inc.’s position on the Marketplace Fairness Act and the small business exemption, please visit our Issues page.