Amazon.com, Inc. (NASDAQ:AMZN) recently said it would support federal law allowing states to collect sales tax from online retailers as long as small businesses also pay.
While testifying in front of Congress on Wednesday about this topic, Paul Misener, Amazon Vice President for Global Public Policy, said he supported an “even-handed” method of collecting state sales taxes from online retailers. Misener said,
“Congress should authorize the states to require collection, with the great objects of protecting states’ rights, addressing the states’ needs, and leveling the playing field for all sellers.”
Misener did argue that Congress should develop a collection plan to include smaller online businesses along with larger ones. He noted that a “small seller exception” has to be limited and said,
“Congress should not exempt too many sellers from collection, for these sellers will obtain a lasting un-level playing field versus Main Street and other retailers. Congress should rectify the current imbalance and avoid a future imbalance.”
This language may not endear Amazon to smaller retailers.
Misener’s testimony comes after Congress introduced a bill in November that would require U.S. consumers to pay sales taxes at online vendors above a certain sales number. The bill, called Enzi-Alexander-Durbin or the Marketplace Fairness Act, has proposed that online businesses with “gross annual receipts in total remote sales” exceeding $500,000 will be required to collect tax.
Amazon supports the bill; however, other retailers are not as enthusiastic.
Joining Misener on The Hill yesterday was Tod Cohen, Vice President and Deputy General Counsel for eBay Inc. (NASDAQ:EBAY). During his testimony, Cohen called the bill “anti-business” and said that by applying comparable tax collection standards for all, it would hurt both small online retailers and customer.
“The Internet sales tax bills that have been introduced in this Congress would change the playing field in a way that would apply sales taxes to small business retailers in the same manner as giant retailers,” said Cohen. “This change in law would mean that consumers would face a new tax cost on goods purchased from small remote retailers, but the consumer would not gain benefits tied to presence. This means that the shopper will be less likely to buy from small retailers on the Internet.”