A group of states calling themselves the Streamlined Sales Tax Project (SSTP) is lobbying Congress to give them the authority to require out of state businesses to collect and remit sales taxes for Internet commerce. The complex rules and tax rates could be regularly modified and changed by a Streamlined Sales Tax Governing Board, comprised of a group of state tax officials from the member states.
The SSTP does not propose establishing a single sales tax rate among the states, nor does it even require a single sales tax rate within each state. Instead, the Internet sales tax regime envisioned by the SSTP would be complex and costly to small business sellers, who would be responsible for thousands of state and local tax jurisdictions across the country.
- Internet sales tax would require small businesses to navigate a very complex system.
- Internet sales tax would place a disproportionate burden on small online retailers.
- Uncollected taxes from online transactions would not generate enough state and local revenue to justify the increased financial and administrative burden on small businesses.
- SSTP legislation gives a self-appointed group of state officials the power to determine national tax policy with limited federal oversight.
eBay supports protections for small businesses in any proposal to change federal tax law.
Congress can protect small business from new tax burdens by including a robust small business exemption. eBay supports including a "Small Business Exemption" provision in any proposal to change federal law related to sales tax collection and remittance that would empower the US Small Business Administration to determine which small business retailers would be exempt from the new Internet sales tax regime.
In a tough economy, we should empower and protect small businesses. It does not make sense to increase tax burdens on small businesses in such a tough economy. Instead, Congress should work to protect and help grow small businesses and empower consumers.