Online retailer eBay wants to stop an internet tax proposal in the Washington Legislature. To do that the company is rallying its customer base.
If you live in Washington state, you might have gotten the email from eBay. It begins: “The Washington State Legislature is threatening to impose new Internet sales tax burdens on you.” It goes on to urge the recipient to send a form letter to Washington lawmakers opposing “harmful tax laws.”
So what’s this about? EBay’s Brian Bieron said the company is alerting its customers to a proposal to require out-of-state retailers to collect sales tax from Washington residents.
“It’s the right of all of our users to know when new tax policies would impact their ability to … sell online or shop online, we think that they want to know and they want to get involved,” Bieron said.
One person who got the eBay email is the sponsor of the internet tax bill. Democrat Kris Lytton recently bought some silverware on eBay. She said she called and emailed the company to say the policy she’s proposing is “fair and levels the playing field.”
The fact eBay is emailing its customer base now indicates the company is concerned the internet tax bill will be part of a final budget deal in Olympia.
Washington House Democrats and Senate Republicans are currently trying to hash out a compromise budget that fully fund schools. That agreement will likely include some additional sources of tax revenue. Of all the choices on the table, capturing sales tax from more online sales might prove the most palatable to tax-averse Republicans.
House Democrats estimate the proposal could bring in an estimated $341 million over the next two years.
Retailers would have the choice of collecting and remitting the sales tax or reporting Washington state customers to the Washington Department of Revenue so it could collect the tax.
EBay isn’t the only opponent of the internet sales tax proposal. TechNet, representing more than 70 companies, said it amounts to an end-run around the longstanding rule that companies without a physical presence in a state don’t need to collect that state’s taxes.
TechNet warns of protracted legal challenges if Washington tries to tax out-of-state internet sales.
Lytton responded that she’s confident the sales tax proposal could withstand a legal challenge.