Uneasy Rhetoric

There’s a link on Ebay these days that reads “51 Members Of The United States Of eBay Use Their Voice in Washington D.C.” Ebay starts off trying to market this group as ambassadors of small, Ebay-based businesses (which, I will admit, they are), one from each state. As I read down I saw exactly what I expected to see:

One topic discussed throughout the day was the State Sales Tax Project, which is a proposal that seeks to require online businesses to collect tax from their buyers and then remit the taxed amount to the buyers’ tax districts. Proposals like these are one of the reasons that fisbill went on the trip. “We informed the congressmen about the concerns that sales tax collection nationwide would cause for small businesses.”

Ebay is using its clout to try to scare Congress into thinking that any serious attempt to collect state sales taxes from Internet sales will mean the end of small business as we know it.

Sure, it will be a burden on Internet businesses to collect and distribute the sales tax, but only if they keep their thinking firmly planted in the 20th Century. Frankly, I’m ashamed that Ebay, one of the darlings of the so-called Entrepreneurial Dot Com moment in the 1990s, the owner of online payment processing juggernaut Paypal, hasn’t considered this simple scenario:

All it takes to collect and distribute sales taxes are a few databases to hold the pertinent information and a price. Who might have such database power? Maybe Ebay? Ebay could develop an application - a processing system really - that handles all sales tax transactions for their business clients. Any why limit it to Ebay? Ebay could license this system to other Internet vendors, or to any momandpop.com, and probably at a very reasonable price. They could package it with other offerings, perhaps.

A small fee on top of the collected taxes could pay for the system in much the same way that the major credit card processors charge fees or that Ebay or Paypal charges fees. The fee could be passed on to the customer (probably would be).

The only thing Ebay should be lobbying for is some kind of unified Sales Tax system that covers the entire country, something to streamline rules and processing.

In return, the thousands of Ebay and Internet small businesses would know that they were helping to keep the infrastructure that keeps them in business, open. Just because you ordered that jar on the Internet doesn’t mean it gets shipped on the Internet, does it? Of course not, a delivery driver had to drive on roads paid for with tax dollars.

Oh, and, of course, there’s the Internet itself, which would not have existed without the significant investment of time, talent, and energy of innumerable government workers who saw a military need for a distributed communications system. Internet business would not exist today without the significant investment and support of tax dollars.