Ever since the legal case of South Dakota vs. Wayfair in the United States the issue of online sales taxes has been a hot topic and now eBay has weighed into the debate by delivering a one million signature petition calling for Congress to pass federal legislation on Internet-wide state tax collection. The Supreme Court’s June 2018 ruling on the left many questions unanswered with respect to the collection and remittance of sales tax for online small businesses and the petition asks for lawmakers to provide clarity.
Last week eBay said that it would help sellers by collecting online sales tax in 3 US states.
eBay has welcomed a bill called The “Online Sales Simplicity and Small Business Relief Act” introduced to Congress by Representatives Jim Sensenbrenner, Anna Eshoo, Karen Handel, Zoe Lofgren and Jeff Duncan. The bi-partisan legislation aims to provide a clear and reasonable framework for collecting sales tax from remote small businesses that sell online. Specific measures include:
- A ban on the retroactive collection and remittance of sales tax by remote sellers for any sale prior to June 21, 2018.
- A phased approach for states to impose sales tax collection duty on remote sellers for sales that occur after January 1, 2019.
- A small business remote seller exemption, which applies to remote sellers with gross annual receipts of less than $10 million.
It is imperative to have one national sales tax standard for American small businesses that rely on the Internet. This bi-partisan legislation represents a positive step forward by providing clear direction on Internet-wide state tax collection, which will protect small businesses and encourage continued entrepreneurship. More than one million eBay sellers signed a petition asking the U.S. Government to step in and provide greater clarity on sales tax. Now we’re asking Congress to pass this important piece of legislation, which we believe will help small businesses continue to compete and create jobs.
– Cathy Foster, Vice President Government Relations, eBay
Clearly the most vital measure in this legislation is the exemption of firms selling less than $10m per annum online because it takes the vast majority of merchants out of the scope of the online sales taxes altogether. We’ll keep you posted on the bill’s progress.
