Over 2 Million Retail Employees Will Benefit From AB 28X E-Fairness Legislation

By Bill Dombrowski

It is important to correct several claims made by Bill LaMarr in his post on this website. He argued that small businesses will be harmed by e-fairness; actually, small businesses have been harmed by the lack of e-fairness.

E-fairness means that all retail sales are treated the same. Whether a product is sold in a store or online, tax collection is treated the same way. Unfortunately, online-only retailers don't collect the sales taxes, while their competition is required to do so. As a result, they are able to offer a much cheaper price than brick-and-mortar stores for the exact same product. For over a decade, small and large businesses have been asking for e-fairness at the federal level. More recently, e-fairness has been pursued at the state level. As e-commerce continues to grow, it is important to update our laws so they are consistent with 21st Century commerce.

Without it, small businesses that create jobs, pay their taxes and invest in the community will be forced to close their doors. More and more often, California employers are treated like showrooms where customers come and test out their products and then purchase online from an out-of-state, online-only retailer in order to avoid paying sales tax. Customers are actually required to remit the sales tax from these purchases to the state tax board, but most do not.

Don't be fooled by LaMarr's arguments. If you look closely, it's clear that it's not about small businesses; it's about one company - eBay.

eBay is attempting to secure a special tax exemption for out-of-state sellers that sell to California consumers. At one point, eBay was trying to get a $2 million exemption for these out-of-state sellers. This would result in a direct disadvantage to in-state sellers who collect the sales tax. It would also cause the state to continue to see dollars leave California to be invested elsewhere.

So far, eBay has not been successful in achieving the high exemption that they want.

The coalition mentioned by LaMarr is driven by eBay and the business owner he highlighted is actually an eBay seller.

LaMarr's argument makes sense for eBay; but it costs dollars and jobs for the rest of the businesses in California.

LaMarr further contends that proponents think this measure will solve all of the state's woes. That's not the argument. The argument is that e-fairness is about creating a level playing field for all California businesses. It's about 18,000 jobs that may be lost without e-fairness. It's about revenues that can help us fund schools, parks and public safety. It's about making sure every business operates by the same set of rules creating a fair marketplace where the consumer decides who wins and loses, not government.

It is beyond bewildering why a California-based company like eBay would seek a special exemption for out-of-state sellers that would cost us jobs and revenue at a time when our state needs it most.

E-fairness is good news for California's businesses, economy and government. We need one set of marketplace rules in this state. No exceptions and no excuses... not even for eBay.