eBay Inc CEO John Donahoe has started sending out emails to millions of it’s users on Sunday requesting them to lobby in favor of dumping the Federal Sales Tax legislation.
This sales tax legislation is targeted against small merchants adding a sales tax burden for them.
The legislation includes an exemption for merchants that generate less than $1 million in annual out-of-state revenue.
Donahoe argued in the emails that merchants with less than $10 million in annual out-of-state sales, or fewer than 50 employees, should be exempt. Reuters viewed copies of the emails.
In the emails, Donahoe said the legislation, known as the Marketplace Fairness Act, unfairly burdens small online merchants and asked eBay users to send an email message to members of Congress asking for changes.
In emails to eBay sellers, Donahoe singled out Amazon.com Inc, eBay’s main rival, which supports the current legislation.
“This legislation treats you and big multi-billion dollar online retailers – such as Amazon – exactly the same,” Donahoe wrote. “Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer.”
Amazon generates more than $10 million in sales every 90 minutes, giving the world’s largest Internet retailer more resources than a typical small merchant to collect sales tax in all states, Donahoe argued.
The legislation, due to be voted on by the Senate in coming days, gives states the power to compel retailers outside their borders to collect online sales tax. Currently, states can only require merchants with a physical presence within their borders to collect.
EBay has tapped its users in a major way once before. In 2006, when Meg Whitman was CEO, she emailed users about the issue of net neutrality and the need to keep the Internet open. In that effort, Whitman emailed fewer than 10 million users.
“It’s the biggest grass-roots effort by eBay ever,” said Brian Bieron, senior director of global public policy at eBay. “It’s coming to a head in Congress and now’s the time to give our users the opportunity to share their thoughts.”
The scope of eBay’s lobbying effort suggests the company may have more to lose than Amazon if the legislation becomes law in its current form.
Wayne Johnson, who runs fly fishing retailer Anglers Habitat in Caldwell, Idaho, generates about $2.5 million in annual sales on eBay.
If the legislation passes in its current form, Johnson said he would re-organize his business to get annual out-of state online sales below the $1 million threshold.
That would involve laying off most of his staff, which currently consists of eight full-time employees and an accountant, he said.