Tuesday, July 22, 2014
Inquirer Daily News

eBay boss: Online is special, don't tax us

John Donahoe blames Congress and Amazon.com for threatening to make online retail customers pay their share

eBay boss: Online is special, don't tax us

EBay Inc. CEO John Donahoe. (File photo)
EBay Inc. CEO John Donahoe. (File photo)

Here's the letter, titled Help Us Stop Congress from Imposing New Tax Burdens on You, that eBay chief executive John Donahoe (who paid himself $30 million in cash and stock last year) is sending to eBay employees and clients pushing them to lobby their Congress-members to demand Internet businesses remain more or less exempt from state sales taxes that people who buy in stores pay to finance roads, schools and other public services (except in Delaware and a few other holdouts where there's no sales tax.)  Donahoe also argues that Amazon.com, by slowly agreeing to pay new sales taxes in states that forgive its old sales tax debts, is the enemy, too.

Dear <UserID>, Keeping costs down is a priority for any businessperson. That’s especially true for people like you—successful entrepreneurs and small businesspeople who know firsthand that every penny counts.

But some lawmakers and large retailers want to impose more costs on you by mandating nationwide sales tax collection for your online business, whether you sell through eBay, other marketplaces or your own site.

Are you prepared to collect sales taxes in the more than 9,600 tax jurisdictions across the US? Are you prepared for the potential to be audited by out-of-state tax collectors? These burdens would be the result of proposed legislation. We are fighting on your behalf to prevent this from happening.

Over the years, I’ve heard repeatedly from eBay sellers like you that expanding Internet sales taxes will hurt your ability to grow, create jobs, and fuel competition that creates value for consumers. That’s why for more than 15 years, our company has persistently fought efforts to expand Internet sales taxes and impose new burdens on small businesses.

The threat of Congress passing a bad Internet Sales Tax bill is real. For the first time in over a decade the U.S. Senate recently held a vote on the subject. There was support for some change to the current sales tax rules, but all the details need to be worked out. And make no mistake; the current bills penalize small online businesses.

This legislation treats you and big multi-billion dollar online retailers - such as Amazon - exactly the same. Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer. It may harm your ability to grow and costs jobs, including yours. And if small businesses like yours can’t succeed and grow, that undermines competition, consumer choice and low prices.

Amazon, for example, has fought harder than any other company to require all businesses to collect sales taxes online, while also seeking special tax benefits as it expands its warehouses throughout the country. It’s bad tax policy. And it’s not fair.

Proposed Internet Sales Tax legislation that threatens small businesses is wrongheaded and bad. But we can fight this together. The solution is simple: if Congress passes online sales tax legislation, we believe small businesses with less than 50 employees or less than $10 million in annual out-of-state sales should be exempt from the burden of collecting sales taxes nationwide.

To put that in perspective, Amazon does more than $10 million of sales every 90 minutes. So we believe this is a reasonable exemption to protect businesses like yours from unreasonable tax burdens. That’s what we’re fighting for, and what big companies such as Amazon are fighting against.

Please join me and let your Members of Congress know they should protect small online businesses, not potentially put them out of business. Click here to make your voice heard. Your elected representatives will appreciate hearing from you.

Sincerely,

John Donahoe
President and CEO, eBay Inc. 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
Business Videos:
Also on Philly.com:
Stay Connected