[STORE LETTERHEAD]

The Honorable Arnold Schwarzenegger
Governor, State of California
State Capitol
Sacramento, CA 95814

Dear Governor Schwarzenegger:

As a California-based retail business, I am writing to express my profound disappointment about your recent decision to veto the state's legislative budget. The budget would have made clear that out-of-state online retailers have nexus in California via online affiliates and, consequently, that they must follow existing state law and collect and remit sales tax.

Every year, California is losing millions of dollars in sales tax revenue to online retailers, many of which should be obeying existing state law to collect sales tax. It's estimated that by fairly enforcing the tax law California would recoup approximately $176 million in lost revenue. By refusing to obey the law, companies like Amazon.com are siphoning away critical revenue that should be going to essential local services such as policing and fire fighting. In addition, the resulting inequity among retailers puts law-abiding California businesses at a distinct competitive disadvantage. With a "discount" of almost 10 percent, these out-of-state online giants have an enormous competitive advantage over in-state retailers selling the same goods. These in-state businesses employ thousands of residents and collect millions of dollars in sales tax.

It is not the business of state government to play favorites when it comes to enforcing tax law. The legislative budget establishes a badly needed clarification of state tax law, levels the playing field for in-state retailers, and strengthens our local communities. That is sound policy all the way around, and I am deeply disappointed you did not support it.

If presented again with a legislative budget that clarifies existing state law and makes clear the responsibilities of all retailers to collect sales tax, I sincerely hope you come down on the side of equity and support e-fairness.

[NAME]
[STORE NAME]
[CITY STATE ZIP]
[PHONE NUMBER]
[EMAIL ADDRESS]