eBay’s Donahoe Takes Heat For Internet Tax Scare Tactics

In yet another twist to the heated Marketplace Fairness Act debate, eBay (or rather CEO John Donahoe) got caught in the cross-hairs as backers of the Marketplace Fairness Act fired back against Donahoe, accusing him of using scare tactics on sellers to gain opposition against the bill.

As you may recall, Donahoe sent an email out to sellers a couple of weeks ago urging the site’s nearly 40 million online sellers to contact Congress about the Marketplace Fairness Act. Donahoe claims that he’s not against a national Internet sales tax, but rather that he and eBay feel that the $1 million threshold will harm smaller online businesses. Instead, he wants the threshold moved to $10 million to ensure that these smaller companies don’t get buried in the tons of paperwork he believes this tax will create.


Now we’ve heard from the other side of this debate as the Marketplace Fairness Coalition released a letter that they sent to Donahoe, accusing him of trying to mislead the public about the online sales tax. The letter reads in part:

“Unfortunately, this false claim ignores the language of the bill. As we noted above, this legislation requires states to provide sellers with free software that calculates the sales tax due at the time of filing and files sales tax returns. And, the bill specifically limits the liability of sellers using the state-provided software.

Finally, it is important to acknowledge that the bill includes a $1 million small seller exemption, which would exempt over 99% of all online sellers from any collection or remittance requirement and, of course, eliminate any distant concern about audits.

Fortunately, a broad coalition of sellers, states, and municipalities from across the country, as well as a strong bipartisan majority in the U.S. Senate and Governors in both parties, recognize that the time has come to pass this bipartisan compromise legislation that would level the playing field and restore fairness to the marketplace.”

While Donahoe has stated that regardless of the outcome, the bill won’t hurt eBay or its marketplace, it does kind of remind me of that old Farmer and the Dell song. You know — “The cheese stands alone.” This is especially true since Amazon, WalMart and some other large companies support the bill and eBay appears to be the only one that is vocally against it.

Regardless of this ongoing fight, it looks like smaller online merchants will learn their fate next week as the Marketplace Fairness Act bill appears to be finally headed for a vote. What the outcome will mean to sellers nobody really seems to know, but for once Donahoe and I agree and I think I will continue to ‘Stand With John’ on this one!

About our Guest Blogger This guest post was contributed by Kat Simpson. Kat is a trusted eCommerce author, speaker, educator, and entrepreneur. Kat Simpson has been a successful eCommerce merchant for over 10 years; is an eBay Education Specialist and Gold Level PowerSeller, as well as a successful Amazon merchant. Currently Kat is the hosts the popular weekly eCommerce Podcast That Kat Radio

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