Ebay, San Jose Near Sales Tax Split

San Jose and EBay Inc. could soon enter into a new tax-sharing agreement that would see millions of dollars in local tax revenue from online sales split between the city and the company, Bloomberg Tax reports.

The proposed deal comes just as Gov. Gavin Newsom considers signing a bill that would outlaw such agreements as of the start of next year.

The City Council approved Sept. 24 allowing the city manager to negotiate and execute a 15-year agreement with eBay that would net the city between $5 million and $29.5 million a year. eBay would get 30% of what’s collected above $5 million, which could add up to $150 million over 15 years.

“The proposed length of the Agreement, 15 years, aligns eBay’s and the City’s interests long-term, locking in the agreement amid the potential for regulatory or operational changes that could reduce the ability to collect these sales taxes in the future,” according to a memorandum prepared for the council.

The bill on the governor’s desk, SB 531, was authored by Sen. Steve Glazer (D). It prohibits future revenue-sharing deals with companies like Amazon and EBay, which have been used by municipalities to woo corporations to their regions.


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