Constitutional Limitations on States' Authority to Collect Sales Taxes in E-Commerce

Small business owners and retailers from Michigan and other states appeared before the House Judiciary Committee to address concerns about the unlevel playing field created by not collecting sales taxes from online retailers. The hearing aimed to discuss the marketplace equity act, which proposes to clarify the constitutional limitations on states' authority to collect sales taxes in e-commerce.

Key Takeaways:

Dan Marshall, owner of Marshall Music Company and spokesperson for the Michigan Retailers Association, testified on behalf of small business owners in Michigan, emphasizing the need for online retailers to collect sales taxes to level the playing field.
Patrick Byrne, chairman and CEO of Overstock.com, highlighted the company's $1.2 billion revenue in 2010 and the importance of avoiding multiple taxation of online sales.
Tod Cohen, vice president of government relations for EBay, discussed the company's 100 million users worldwide and the need for a clear and effective solution to collect online sales taxes.
Senator Luke Kenley, representing the Streamlined Sales Tax Governing Board, argued that a streamlined sales tax system would simplify compliance for businesses and reduce administrative burdens.
Paul Misener, vice president of Worldwide Public Policy for Amazon.com, emphasized the company's commitment to tax fairness and the need for a uniform approach to collecting sales taxes.

Statistics:

The total value of goods sold on EBay in 2010 was $62 billion, which translates to approximately $2,000 every second.
Amazon.com fulfilled orders for customers in 50 states and 45 countries within the first 30 days of business.
Marshall Music Company has 300 full-time and part-time employees.
The Michigan Retailers Association represents approximately 4,800 individual businesses.

Sources:

Federal News Service, Inc.
FNS Internet Service at www.fednews.com
www.ebay.com
November 30, 2011