Ebay Recruits Users: CEO John Donahoe Pushes For Changes To Marketplace Fairness Act Via Emails To Users

EBay Inc (Nasdaq: EBAY) initiated a massive push against imminent federal sales tax legislation after the online marketplace’s chief executive, John Donahoe, emailed millions of eBay users who are lobbying for support.

The San Jose, Calif., company has reportedly already sent tens of millions of emails urging its active U.S. sellers to push for changes to the bill known as the Marketplace Fairness Act. The legislation would ultimately allow all states to collect sales tax from online merchants, whether they have operations in that state or not. The e-commerce giant plans to send emails from Donahoe to at least 40 million eBay users.

While the legislation, due to be voted on by the Senate in coming days, gives states the power to require retailers outside their borders to collect online sales tax, current law says that states can only require merchants with a physical presence within their borders to collect.

"The legislation treats you and big multi-billion dollar online retailers -- such as Amazon -- exactly the same," Donahoe said in one of the emails.

The chief executive went on to say in the emails that only businesses with at least $10 million in annual out-of-state sales, or 50 or more employees, should qualify for the proposed sales tax, compared with the $1 million sales threshold in the bill.

Amazon.com, Inc. (Nasdaq: AMZN), the world’s largest online retailer, generates more than $10 million in sales every 90 minutes, giving the Seattle-based company more resources than a typical small merchant to collect sales tax in all states, Donahoe argued.

"EBay believes the bill would impose unfair tax burdens on small businesses, and does not include a reasonable protection for small businesses," Tod Cohen, eBay's general counsel in an emailed statement to the Wall Street Journal.

In its letters Sunday, eBay included a template for users to send to members of Congress seeking the changes.

This isn’t the first time eBay has reached out to its users in order to fight legistlation. In 2006, when Meg Whitman was CEO, she emailed users about the issue of net neutrality and the need to keep the Internet open. Whitman emailed fewer than 10 million users.