EBay recruits users in push against sales tax legislation

The results of a Google image search on Ebay are shown on a monitor in this photo illustration in Encinitas, California, April 16, 2013. REUTERS/Mike Blake
The results of a Google image search on Ebay are shown on a monitor in this photo illustration in Encinitas, California, April 16, 2013. REUTERS/Mike Blake

EBay Inc. Chief Executive John Donahoe began emailing millions of users of the company’s online marketplace on Sunday in an unprecedented lobbying effort to change looming Federal sales tax legislation.

The e-commerce giant plans to send emails from Donahoe to at least 40 million eBay users, including most sellers on the marketplace. The first messages were sent out Sunday morning.

In the emails, Donahoe said the legislation, known as the Marketplace Fairness Act, unfairly burdens small online merchants and asked eBay users to send an email message to members of Congress asking for changes.

The legislation, due to be voted on by the Senate in coming days, gives states the power to compel retailers outside their borders to collect online sales tax. Currently, states can only require merchants with a physical presence within their borders to collect.

The legislation includes an exemption for merchants that generate less than $1 million in annual out-of-state revenue.

Donahoe argued in the emails that merchants with less than $10 million in annual out-of-state sales, or fewer than 50 employees, should be exempt. Reuters viewed copies of the emails.

In emails to eBay sellers, Donahoe singled out Amazon.com Inc, eBay’s main rival, which supports the current legislation.

“This legislation treats you and big multi-billion dollar online retailers – such as Amazon – exactly the same,” Donahoe wrote. “Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer.”

Amazon generates more than $10 million in sales every 90 minutes, giving the world’s largest Internet retailer more resources than a typical small merchant to collect sales tax in all states, Donahoe argued.

EBay has tapped its users in a major way once before. In 2006, when Meg Whitman was CEO, she emailed users about the issue of net neutrality and the need to keep the Internet open. In that effort, Whitman emailed fewer than 10 million users.

“It’s the biggest grass-roots effort by eBay ever,” said Brian Bieron, senior director of global public policy at eBay. “It’s coming to a head in Congress and now’s the time to give our users the opportunity to share their thoughts.”

The scope of eBay’s lobbying effort suggests the company may have more to lose than Amazon if the legislation becomes law in its current form.

Amazon supported a $500,000 annual sales exemption in an earlier version of the legislation, arguing that anything higher would give too many small online sellers an unfair tax advantage over larger retailers.

Amazon also runs a popular marketplace for online sellers, however eBay is still particularly popular with small sellers.

Wayne Johnson, who runs fly fishing retailer Anglers Habitat in Caldwell, Idaho, generates about $2.5 million in annual sales on eBay.

If the legislation passes in its current form, Johnson said he would re-organize his business to get annual out-of state online sales below the $1 million threshold.

That would involve laying off most of his staff, which currently consists of eight full-time employees and an accountant, he said.

More worryingly for eBay, Johnson said he would start selling through Amazon’s marketplace because Amazon handles warehouse storage, order fulfillment and shipping.

Amazon charges extra fees for these services, meaning Johnson’s business may be less profitable, but he said he would be able to keep running the online operation with very few staff.

“That’s where I would go if this bill passes,” Johnson added. “I could do that business with just my son and me.”

 


News
Entertainment
Sports
Lifestyle
Local

DA: Homeless man severely beat by men in…

Two former college football players pleaded not guilty to the alleged severe beating of a homeless man in Allston earlier this year.

National

Hamas, Abbas's PLO announce reconciliation agreement

The Gaza-based Islamist group Hamas and President Mahmoud Abbas's Palestine Liberation Organization (PLO) agreed on Wednesday to a unity pact.

Local

Reports: Dead man pulled from water at Boston's…

A dead man was reportedly pulled from the water at Boston's Long Wharf Wednesday afternoon, according to the Boston Fire Department.

Local

Primark to make US debut in Boston

Dublin retailer Primark will make its U.S. debut with a store at the former Filene's site in Boston.

Going Out

Thursty: Revamped Audubon is back in action

Having been a long time fan of Trina's Starlite Lounge in Inman Square, one of my only complaints about the place is that there's only…

Entertainment

Here's what to do in Boston this weekend

MUSIC Huun Huur Tu Friday, 8 p.m. First Church in Cambridge 11 Garden St., Cambridge $28, 617-876-4275 www.worldmusic.org This group comes from the tiny nation…

Television

TV watch list, Wednesday, April 23: 'Suburgatory,' 'Modern…

'Suburgatory' The men of "Suburgatory" go camping and Tessa mentors a social outcast in a Miss Chatswin contest, which brings her, once again, into conflict…

The Word

The best lines from Oprah's ex-stepmother's Daily Mail…

Oprah’s ex-stepmother, Barbara Winfrey, is out for revenge.

MLB

Fantasy baseball: Searching for early season prospects

It’s relatively rare for a mediocre 30-year-old hitter to suddenly go nuts offensively for 162 games. That’s why minor league prospects are so exciting.

U.S. Soccer

NYCFC 'targeting' US international Mix Diskerud

Metro New York has learned Mix Diskerud has drawn “interest” from the expansion MLS side, NYCFC.

MLB

Statistics show plate approach for Red Sox has…

Statistics show plate approach for Red Sox has been off so far in 2014

MLB

MLB video highlights: Yankees rout Red Sox, 9-3

Jon Lester allows eight runs in 4 2/3 innings taking loss

Style

Pippa Middleton's Etsy pick: Golden Thread Jewelry

Get a look at the jewelry Pippa Middleton loves and find out how you can buy it too.

Parenting

What every parent needs to know to get…

Mom and author of "Small Talk," Tracey Blake, shares her five practical tips to help you develop your children's language skills.

Sex

Subway crush: Meet your soulmate on your commute

Read about a couple who has been 40 years after meeting on the train.

Tech

Happy birthday, Game Boy! The handheld console turns…

Nintendo's Game Boy turns 25 this week. To commemorate, we look at some of its better games, like "Tetris" and "The Legend of Zelda: Link’s Awakening."