Ebay (NASDAQ:EBAY) CEO John Donahoe isn't really against online sales taxes. At least that's what he was insisting from the stage at an industry conference on Tuesday (May 2), according to All Things D. "We're not against an Internet sales tax," Donahoe told the Fortune Brainstorm Green conference. "But the Internet sales tax has to work."
By that, Donahoe means that the "Marketplace Fairness Act" that is expected to be passed by the U.S. Senate next week needs to be amended so that small merchants doing less than $10 million in out-of-state business should be exempt from having to collect out-of-state sales taxes. The Senate bill sets a $1 million exemption.
Is this a change of heart on Donahoe's part? Ebay has led the opposition to online sales taxes ever since Amazon (NASDAQ:AMZN)—which originally fought online taxes at every turn—switched sides in 2011. Less than two weeks ago, eBay sent out emails to at least 40 million of its users and sellers, lobbying against the bill. If this is a change in Donahoe's position, it's a sudden one.
But that seems unlikely. That $10 million exemption line is already likely to be added to the bill in order to get it through the U.S. House of Representatives' Ways and Means Committee, whose chairman, Rep. Dave Camp, has also pushed for the $10 million threshold. Donahoe knows that. But Donahoe also knows that out-of-state online sales tax collection could get very messy for eBay, since it's a prime source of information on how much sellers have sold, regardless of whether the cap is $1 million or $10 million.
And while sellers may have to deal with as many as 46 sales-tax-collecting states, eBay is guaranteed to get information demands from them all. And that's all on top of any direct hit to eBay's marketplace and auction businesses.
For the record, eBay sales in California are already liable for sales tax. According to the San Francisco Chronicle, that apparently hasn't hurt eBay's business in its home state. And when the law to impose the taxes was working its way through the state legislature, eBay was pushing for a $1 million exemption (it ended up with $500,000).
Still, it's easy enough for Donahoe to clear up any confusion around how he feels about online sales taxes. All he needs to do is wait until the U.S. House raises the exemption to $10 million, then announce that eBay fully supports the law and will lobby to get it passed.
We'll all be watching to see if that ever happens.
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