Amazon & Ebay Weigh In On Online Sales Tax
Currently online retailers only have to collect state sales taxes if they have a physical presence in that state. If the retailer doesn’t collect the tax, it’s up to the purchaser to send the sales tax to the state. However, this rarely happens. Across the nation lost sales tax revenue from failure to collect online sales taxes is estimated at upwards of $23 billion.
There are a number of bills that have been introduced in Congress this year to create a national scheme for collecting state sales tax in online transactions (e.g., The Marketplace Fairness Act which is currently in the Senate). On Wednesday representatives from Amazon and Ebay testified before congress on an exemption that would preclude small businesses from the obligation of collecting out of state sales tax in online transactions. Both Amazon and Ebay support such an exemption. However, Amazon’s position is that only companies with revenues less than $500,000 should be exempted, while eBay’s position is that companies shouldn’t be subject to this tax unless they have revenues in excess of $30,000,000.
Zynga to Seek $10 Billion Valuation in IPO
Seattle’s Zynga, a producer of social games such as FarmVille and Words With Friends, is seeking a $10 billion valuation in an IPO. The IPO would raise around $900 million in proceeds, and stock is expected to be priced at $8-10 per share. Zynga’s executives are expected to start a nine day road show next week.
Central Banks to Help Euro Zone; Dow Has Best Day in Two Years
The Federal Reserve and five other central banks have agreed to help with the European debt crisis. These central banks have agreed to reduce the cost of borrowing for the strained markets. With this news, the Dow jumped 490 points (4 percent) – its best single-day gain in over two and a half years.
Facebook Reaches Settlement in Privacy Claims
Facebook reached a settlement with the Federal Trade Commission on charges that it violated users’ privacy rights by sharing more than the users agreed to when they signed up for Facebook. As part of the settlement Facebook will now seek permission from users prior to changing privacy and data terms, and Facebook will now submit its privacy policies to review by outside auditors for the next 20 years.
Biggest Online Commerce Day Ever
Cyber Monday 2011 was the biggest online commerce day ever. Online sales reached $1.25 billion, up 22% from last year’s record $1.03 billion. By shopping online these consumers avoided the dangers of the competitive shopping on Black Friday.