eBay asking users to fight Internet sales tax

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The CEO of eBay, John Donahoe, has been emailing millions of the site’s users urging them to lobby their representatives in Washington against the looming federal sales tax legislation currently in the Senate.

Reports are that eBay plans to send the emails to about forty million of its U.S. users, including sellers and buyers in the next few days.  Teh first few messages were sent out Sunday morning and caught by Reuters, who broke the story.  The legislation, known as the Marketplace Fiarness Act, says Donahoe in the emails, unfairly burdens small online merchants and urges the reader to contact their representatives in Congress to ask for changes.

The Marketplace Fairness Act is currently on the roster for the Senate and will likely be voted upon in the next few days.  It gives states the power to compel retailers outside of their borders to collect online sales tax on their behalf.  This would be an expansion of current law which allows states to require merchants within their borders to collect.  An exemption for merchants generating less than one million in out-of-state revenue is included, but Donahoe argues that this should be $10 million and less than fifty employees as the burden would end up requiring sellers who don’t meet the $1M criteria to potentially collect taxes for all fifty states, with rules and amounts differing for each state.

eBay’s rival, Amazon, supports the current legislation, which would obviously hurt eBay more than it would Amazon.  The grassroots effort by eBay may prove successful, as a similar campaign in 2006 by then-CEO Meg Whitman had a noted effect on net neutrality legislation.

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