We completely agree with the recent Seattle Times editorial advocating congress to enact consistent sales-tax laws, and we take issue with the misleading letter-to-the-editor response by Tod Cohen of eBay.
Mr. Cohen’s letter is correct that enacting such legislation would require online businesses to comply with local tax codes – in the same manner that local businesses must. However enacting such legislation does not necessarily impose “significant new costs and accounting burdens.” It is true that businesses will be affected – they will need to modify their systems to lookup local tax rates. Online merchants well equipped to implement such changes – as they needn’t be any more complicated then mechanisms relied upon to lookup shipping charges (a generally expected feature during checkout).
It is disingenuous to suggest to the readers that the streamlined approach to sales tax would involve an “increase [of] taxes on small businesses in such a tough economy.” Sales taxes are paid by the consumer, at the time of purchase. Just as sales tax is collected at the grocery store when buying a gallon of milk, so too they should be collected by the online merchant when buying a product.
Instead of spending it’s time prodding public opinion, perhaps eBay government affairs could focus its efforts on being part of the solution – by collecting local sales taxes that local voters/consumers have already agreed are needed to pay for our roads, schools, police, and hospitals. We would be more than happy to help eBay achieve this goal.
