Thursday, July 23, 2009

Not Another eBay Video!

I don't have much time to write these days, but I came across this video clip from CNBC where an analyst says “[EBay] took the buyer base that they had for granted and basically let the sellers run the business to the benefit of their individual businesses, but not to the benefit of the buyers ...”

So I thought I would have some fun and see what you guys and gals thought. Listen to the interview and give me your 15% in the comments

Sam, I posted another video just for you.

Just my 15%

Wednesday, July 01, 2009

The Corporate Blogger - An Interview with eBay Blogger RBH

Just my 15%

Blast From the Past: Let's Talk Sales Tax on the Internet.

Sorry to rehash an old blog post, but I thought it was relevant in light of the recent news coming from Amazon and Overstock. The wave of States going after online retailers for Sales Tax collection is becoming a Tsunami. This post was originally written in January of 2009.

Brick & Mortar stores have been complaining for years about the competitive advantage online stores and catalog companies have regarding sales tax. To be completely honest, I make most of my online purchases at Amazon because I don't like paying sales tax. I like the current system just the way it is, but it will change and sooner rather than later. [I now make all of my online purchases at and pay sales tax because is based in California.]

Unfortunately the tide has turned and will soon be gathering steam as State after State follows the model New York started:

"New York state won a round in court against over a new law requiring out-of-state online companies to collect sales tax from shoppers in New York.

The law applies to companies that don't have offices in New York, but have at least one person in the state who works as an online agent -- someone who links to a Web site and receives commissions for related sales."

Of course this is just round one of the court battle and my guess is that Amazon will continue this fight up the Judicial ladder until it is presented to the US Supreme Court, but it is just a matter of time before sales tax is charged on every purchase from Brick and Mortar to online stores.

I'm resigned to the fact that it will happen in the near future, but I'm very concerned with the implementation. Small business cannot manage collecting a different sales tax for every city they ship to, it would cause an undue burden on all but the largest of companies.

In my years selling online with Glacier Bay, we shipped to every single state in the US and managing the different sales tax requirements for each local jurisdiction would have made my low margin business implode. Just look at the different tax rates for each state.

I think there is a simple solution, but as yet I haven't heard any lawmakers presenting it, though I'm sure I'm not the only one to come up with it.

The Internet should be treated as its own locality with a flat sales tax rate of 4 - 5%. All sales on the Internet need to have the same sales tax rate irregardless of where the customer is located. Payments need to be made to a national clearinghouse for distribution to the states.

This of course will only be the first stage of the process because once governments start seeing the cash they will of course want more. In the first iteration though, local governments will not take part in the revenue unless they work out a deal specifically with their state's tax department.

Let me be clear, I do not want this to happen, but it is inevitable that sales tax collection will come to the Internet and online retailers need to band together now to enact something close to what I've presented (and I'm sure others have as well) while they still have some negotiating leverage.

The key is not to solve the tax problem all in one fell swoop, but to come up with a workable solution that gets state government tax revenue and does not put an undo burden on retailers to collect that tax.

Just my 15%