eBay CEO says online sales tax bill to hurt small business, job growth

The online sales tax act is not fair and could bring damage to small enterprises and the jobs they create, said John Donahoe, chief executive officer of eBay Inc., one of the world's leading e-commerce companies, Tuesday.

In an article carried on the Wall Street Journal, Donahoe, said the problem with the online sales act is that "it treats mom-and- pop businesses the same way as it does multibillion-dollar retailers."

He argued that a small business with a dozen employees simply can't be lumped in with national behemoths such as Amazon and retail chains that have warehouses and stores around the country.

Internet retailers in the United States currently don't have to charge local sales taxes to a customer so long as they don't have a "physical presence" in the customer's state.

However, in a bid to flatten the playing field between online retailers and brick-and-mortar stores, U.S. Senators recently launched a bill which would empower state and local governments to require internet retailers with sales over 1 million dollars annually to collect sales taxes and send the revenues to the appropriate venues.

Donahoe said the proposed bill would require small businesses to collect sales taxes on behalf of every state where they make a sale, which would make it difficult for them to succeed. He said small businesses with fewer than 50 employees or with less than 10 million dollars in annual out-of-state sales should be exempted from collecting sales taxes nationwide.

The Senate advanced the bill, known as the Market Fairness Act, in 74-20 procedural vote on Monday evening and a decisive vote is expected later this week.