Amazon Supports While eBay Opposes Online Sales Taxes Bill

The online marketing sites eBay Inc. (NASDAQ:EBAY) and Amazon.com, Inc. (NASDAQ:AMZN) seems to have ended up on the opposite site of the spectrum about the new bill regarding the internet sales tax after eBay voiced its opinion strongly against the new bill which has been introduced earlier on Wednesday in the senate.

States will be empowered to collect sales taxes from out of state online marketing sites and catalog retailers.  The Marketplace Fairness Act, sponsored by the Republicans Michael Enzi of Wyoming, Lamar Alexander of Tennessee and Dick Durbin, the Democrat from Illinois will aim to create national sales tax for online purchases allowing the states to pursue two paths to collect unpaid sales taxes in terms of billions on various goods bought on the internet. The states can compel the online retailers to charge sales tax to customers and remit the same once they sign on to the multistate legal agreement and bring their sales tax codes in conformity with that of other states.

According to this bill, the states which do not sign this multi state legal agreement can still collect internet sales taxes once they adopt few minimum standards.

At present, the online shoppers in Ohio are required to report their online purchases on their tax forms known as use taxes which many people don’t and organizations in Central Ohio like the Ohio Council of Retail Merchants are supporting the federal lawmakers to come up with a solution in order to close the tax loophole.

The vice president of eBay, Tod Cohen in a statement said that the new tax bill will affect the interests of small business retailers and there will be a imbalance in the playing field between the small businesses and retail giants. The new internet tax bill will burden the small businesses and prove as a deterrent to entrepreneurs instead of encouraging them to create more jobs and contribute to the growth of the economy.

Amazon.com is backing the new bill by saying that the company welcomes this measure which seeks to create a constitutional framework for collection of online sales taxes. Amazon.com was previously the one which strongly opposed the state’s effort to impose sales taxes on online retailers with in-state affiliation.

According to the bill, the online sellers who make online remote sales below $500,000 will be exempt from the tax collection requirements.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.