Online Business Sales Tax One Giant Step Closer to Passage

There’s been big movement this week in the battle over whether or not online and other small businesses must charge sales tax when selling their products over the internet to buyers across state lines, something they have not been required to do previously and that many believe has put them at a distinct advantage for far too long. Yes, after years of back and forth on its pros, cons and implications for equity in the marketplace between online retailers and brick-and-mortar stores, the so-called Amazon Tax (more formally known as the Marketplace Fairness Act) may very well become the law of the land shortly.



Having won official backing from the President earlier, the proposed legislation was expedited by a significant Senate majority on Monday and will likely be voted on sometime today or tomorrow, where it is anticipated to pass the Democratic-controlled body with flying colors. Outlook for its passage in the House is less certain given that a number of Republicans, the current majority, deem it to be an unacceptable tax increase that will serve only to create costly complications when it comes to conflicting state laws and the need for software to manage it all.


Asserting that the proposed legislation as written would therefore disproportionately harm small business entrepreneurs in particular, eBay CEO John Donahoe, a key opponent of the bill, believes the threshold for compliance should be changed from $1 million to $10 million in out-of-state revenues. This would, at the very least, ensure that only the largest of online retailers, such as Amazon, are affected by the bill’s passage, something they are more readily equipped to handle.

Steve Delbianco, who represents a coalition of e-commerce companies called Netchoice that also opposes the legislation, reinforces this position and goes one step further, saying “This bill has never been about helping Main Street but about helping Big Box stores.” Large brick-and-mortar retailers such as Wal-Mart, Best Buy and Dick’s Sporting Goods, among hundreds of others— as well as strictly online retailers, like—support the measure., in particular, has already begun to collect taxes on purchases made in various states, with more being brought into the fold each day.

Meanwhile, Ebay’s particularly aggressive support for the Marketplace Fairness Act these last few weeks has innumerable smaller retailers from across the country all fired up, and they’re fighting back…

“As a small business retailer, I compete on price and work hard to serve my customers, but I don’t have the ability to forgo collecting sales tax at the point of purchase,” said one. “I hope the U.S. Senate stands up for the small businesses across this country (who) are the economic engines that fuel our local communities. Enough is enough; eBay should stop asking for government special treatment and compete fairly in the free market economy.”

Said another, “I am not asking for a government handout to make my business thrive; I am simply asking for a level playing field where the government doesn’t decide if my business is going to succeed or fail.”

Time will tell us where this intense and longstanding debate will finally lead. However, the House is due to start hearing arguments soon, making resolution on the issue one step closer to becoming a reality.

For more information on the Amazon Tax Debate and how you as  a low investment business can weigh in with your opinions, we recommend the following resources:

Pro Internet Tax

Alliance for Main Street Fairness

Con Internet Tax

eBay (position statement on Mashable)

Past Articles on this Topic

The Amazon Tax Debate: Where Do You Stand?

“Amazon Tax” Debate Rages on in America’s Most Populous State

Online Shopping Tax Debate Heats Up Once Again

HOT TOPIC! If you’re a small business owner, especially one who does much of your business online, how do you think the new Amazon Tax law affect you? Are you a fan? Why or why not?