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eBay Seller Testifies At Congressional Hearing On Internet Sales Tax

July 24, 2018

The U.S. House of Representative Committee on the Judiciary held a hearing today to examine the recent S. Dakota v. Wayfair Supreme Court ruling and how it could affect small businesses. The recent Internet sales tax ruling overturned the long-standing, physical presence sales tax collection standard. Overturning this standard now allows a state to impose sales tax burdens on large retail businesses who do not have employees or facilities in the state’s borders.

Today’s Judiciary Committee hearing was called to examine the ramifications of the Wayfair decision on consumers and small businesses. Among those testifying at the hearing was Chad White, an eBay seller and owner of Class-Tech Cars. Started out of his home 17 years ago, this small business now has eight employees, over 6,500 products listed on eBay and sells classic car parts and products across the globe.

I honestly do not know how we would handle having to increase this collection and remittance compliance from a few location to thousands across the country.

Like many U.S. small businesses, the Wayfair decision has raised concerns for Chad. “We collect and remit sales tax like any other business in those states where we have a physical presence,” said Chad. “I honestly do not know how we would handle having to increase this collection and remittance compliance from a few location to thousands across the country.”

In addition to sales tax collection and remittance, audits from far-away states and a multitude compliance measures across thousands of U.S. taxing jurisdictions could have a severe impact on small businesses. As Chad pointed out, “Certified service providers’ (CSP) audit protection guarantees fall flat when a state or local jurisdiction simply claims there is misrepresentation or fraud. Once a small business receives a demand letter from a far-away jurisdiction, they are left with the lose-lose decision of just paying or trying to defend themselves in a foreign state tax court.”

eBay would like to thank Chad for taking time away from his small business to testify before the House Judiciary Committee on behalf of all Internet-enabled small businesses. The eBay Government Relations team will continue to encourage Congress to step in and provide clear tax rules with a strong small business exemption.