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Internet Firewall Breached by Senate Action for Online Sales Tax

The U.S. Senate has voted to take up the Marketplace Fairness Act that would allow states to tax out-of-state retailers with annual online sales exceeding $1 million. Some consider the bill, if passed by the Senate and House and signed by the President, to be a new intrusion into Internet freedom.

Marketplace Fairness Act

Companies, such as e-Bay Inc., who deal with small Internet retailers, have lobbied against the Senate measure, hoping to increase the threshold amount for those to be eligible for exemption. John Donahue, CEO of e-Bay has sent millions of emails to customers urging them to lobby Congress. The Financial Services Roundtable has become involved because it fears the bill could lead to consideration of a financial transaction tax.

In the first quarter of 2013 e-Bay Inc. reported spending $481,951 on lobbying.The Financial Services Roundtable spent $2,240,000 lobbying in the first quarter.

Companies who supported the Senate bill include Amazon ($856,831 lobbying), Wal-Mart ($1,840,000), Best Buy ($550,000), and theNational Retail Federation ($640,000).

Major companies concerned about Internet freedom continue to lobby for their general views. In the first quarter of 2013, Google Inc. spent $3,350,000 lobbying, the same as the last quarter of 2012. Facebook Inc. spent $2,450,000 lobbying, up from $1,400,000. Yahoo! Inc. spent $710,000 lobbying, up from $640,000.

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