An Amazon.com executive today told Congress that the company supports federal legislation providing a constitutional framework for states to collect taxes on online retailers — including those based out of state. However, the Seattle company cautioned against allowing too many of its smaller rivals to avoid the tax.

Amazon says it supports the Marketplace Fairness Act introduced in the U.S. Senate on Nov. 9, for creating the new tax framework. That bill includes a “small seller exception” allowing states to only collect the tax on companies with total “remote sales” of more than 500,000 in the U.S. in the previous calendar year.

In separate testimony before House committee, eBay vice president Tod Cohen opposed the federal legislation, saying that small retailers should not be taxed in the same manner as their larger rivals.

“The real world effect will be to disadvantage small business retailers, a segment of retailers that is already losing market share under the status quo,” Cohen said. “This is why these bills are anti-small business.”

Paul Misener, vice president for Amazon global public policy, disagreed in his testimony before the House Judiciary Committee.

“Fairness among sellers should be created and maintained. Sellers should compete on a level playing field,” said Misener in his testimony. “Congress should not exempt too many sellers from collection, for these sellers will obtain a lasting un-level playing field versus Main Street and other retailers. Congress should rectify the current imbalance and avoid a future imbalance.”

Amazon has been battling states across the country over the collection of online sales tax from out-of-state retailers, but the company notes that it has long supported the resolution of the issue at the federal level.

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