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Amazon and eBay support online sales tax, disagree on taxing smaller sellers

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Amazon Supports authorizing states to collect sales tax as long as very few retailers are exempt, and eBay wants to protect small businesses with an exemption so they can better compete against large internet sellers.

Amazon Box Padded
Amazon Box Padded

Amazon has long fought the efforts of states to collect sales tax on purchases made across borders over the internet, but today it testified before Congress in support of authorizing states to collect out-of-state taxes as long as they apply equally to all businesses. Untaxed out-of-state e-commerce has become an increasingly tempting target for states to ease the strain on their tight budgets, and if the states are going to tax internet sales, Amazon wants to make sure everybody has to pay up equally.

However, eBay disagreed, telling Congress that small sellers should be exempt from the tax because they already face higher proportional costs of doing business, and collecting sales taxes would only add to that disadvantage. Of course, eBay is composed of thousands of small sellers that would gain a competitive advantage against Amazon if they were exempt from sales tax, so it's not a surprising position. Either way, it seems clear that taxes on internet sales are coming — Amazon and eBay are just fighting over where to draw the line.