Dayton Business Journal...
Internet retailers split over online sales tax bill
Thursday, November 10, 2011 

Amazon.com Inc. endorsed a proposed national online sales tax bill introduced Wednesday, but eBay Inc.    criticized it. 

Republicans Lamar Alexander of Tennessee, Michael Enzi of Wyoming and Illinois Democrat Dick Durbin introduced the bill, which would create a national sales tax for online purchases and give states two paths to collect billions in unpaid sales taxes on goods bought over the Internet. States that sign on to a multistate legal agreement and conform their sales tax codes with other states “can compel Internet retailers to charge and remit the sales tax.” 

States that don’t sign the interstate compact can collect Internet sales taxes if they adopt minimum standards. 

Currently, online shoppers are supposed to report their purchases on their tax forms --— called “use taxes” in Ohio — but many don’t. A group of Central Ohio business owners is supporting efforts by organizations such as the Ohio Council of Retail Merchants to push federal lawmakers to close the tax loophole. 

More than 60 percent of Ohio households made at least one online purchase in 2010, but less than 1 percent of state income tax returns included payments for those transactions, according to a study by the University of Cincinnati‘s Economics Center. 

Ohio governments stand to lose more than $200 million this year because of unreported Internet purchases, according to Focus on Ohio’s Future, the research arm of the Council of Retail Merchants. Ohio retailers will lose $600 million, the research entity found. 

Paul Misener, Amazon’s (NASDAQ:AMZN) vice president of global public policy, hailed the proposal. The online retail giant has been the target of states including California that are trying to force collection of state sales taxes. 

“It’s a win-win resolution – and as analysts have noted, Amazon offers customers the best prices with or without sales tax,” Misener said. 

Tod Cohen, vice president for government relations and deputy general counsel at San Jose-based eBay (NASDAQ:EBAY), however, said the proposal hurts small businesses at the expense of large online retailers like Amazon. 

“This is another Internet sales tax bill that fails to protect small business retailers using the Internet and will unbalance the playing field between giant retailers and small business competitors,” he said. “It does not make sense to expand Internet sales tax burdens on small businesses at a time when we want entrepreneurs to create jobs and economic activity.” 

Other opponents of the bill in its current form include Overstock.com Inc.    and Internet giant Yahoo Inc.    , according to Reuters. 

Other big-box retailers supporting the bill include Target Corp. and Wal-Mart Stores Inc., according to other media reports. 

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