Ebay calls for nationwide internet sales tax in the US

Ebay is calling for a nationwide US internet sales tax after warning that individual state sales taxes were harming “small businesses and consumer sellers”.

Thirty-three US states have now implemented regional sales taxes in a bid to prevent internet retailers like Ebay exploiting a loophole allowing them to base themselves in a state with lower tax rates.

According to Ebay, these taxes dragged US sales volume growth down six per cent in the final quarter of 2019, adding that it expects this to continue into the first half of 2020 but should improve as customers became familiar with the price increases.

READ MORE: Ebay sales falter as analysts call Amazon the “primary culprit”

“This rollout happened faster than anticipated and affected small businesses and consumer sellers requiring marketplaces to collect and remit on their behalf,” Ebay’s interim chief executive Scott Schenkel said.

This comes after the online marketplace warned investors yesterday that it would miss analyst estimates this quarter, with experts citing Amazon as the “primary culprit”.

Ebay said that earnings for its first quarter will come in at 50 to 53 cents per share on sales of $2.55 billion to $2.6 billion (£2 billion), missing estimates of 71 cents per share and revenues of $2.64 billion (£2.03 billion).

This also demonstrated yet further stagnant growth after reporting sales of $2.8 billion (£2.15 billion) in its previous quarter and profits of 81 cents per share, despite the company forcing through significant changes last year in an effort to rejuvenate its sales.

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