And mobile revenue increases year over year on Black Friday, as more shoppers turn to their smartphones, a new study finds.
In a move to raise close to $10 billion over the next several years in tax revenue, an amendment to the housing bill in the U.S. Senate requires payment card processors to provide information on Internet sellers to the IRS.
In a move to raise close to $10 billion over the next several years in tax revenue to support federal housing assistance efforts, an amendment to a housing bill in the U.S. Senate requires payment card processors to provide information on Internet sellers to the Internal Revenue Service.
The amended bill, the Foreclosure Prevention Act of 2008, would require payment card transaction processors including merchant acquirers and electronic funds networks, starting Jan. 1, 2011, to provide to the IRS the dollar value of online credit and debit card transactions, plus other information on individual sellers including their name, address and tax identification number. By 2018, the measure is expected to produce $9.8 billion in tax revenue related to business income that would otherwise not be collected. The bill is not related to a direct tax on consumers or involve information on consumers.
The amendment, which exempts online sellers with maximum annual sales of $10,000 and those with 200 or fewer annual sales transactions, was designed to cover the thousands of eBay sellers who exceed those thresholds, says Daniel Ballon, a policy fellow in technology studies at the San Francisco-based Pacific Research Institute, who has closely followed the housing bill. “The inclusion of all third-party settlement organizations was designed to target eBay Power Sellers,” Ballon says. “If they make more than $10,000 per year, the IRS will receive information about their sales.”
A call to eBay for comment was not immediately returned.
A spokeswoman for a payment processing company, who asked to remain anonymous, said several payment companies were opposed to the amendment and working with the U.S. Chamber of Commerce to clarify their responsibilities under the housing bill.
Senator Max Baucus (D, MT), chairman of the Senate Finance Committee, said on the floor of the Senate last month that the amendment was designed not to be overly burdensome to payment processing companies. “The proposal would give ample time to banks and others so that they can program their systems and to verify the information that they need from sellers before issuing the information documents,” he said, adding: “This proposal does not raise taxes on anyone. These information reports would just cause people to file more accurate returns.”
But a statement issued by the U.S. Chamber of Commerce contends that the bill would impose extensive new costs on merchants as well as on payment processors. “Many participating merchants will bear additional expenses related to the burdens of converting a payment distribution system that was previously not taxpayer-specific into one that would be,” the Chamber says.
The business group has also called on the federal government to approve an independent study of the bill to determine the true costs of implementing it.