Sales Tax Initiative

On January 6, the Illinois House of Representatives passed HB3659, legislation that contains a sales tax fairness provision. The bill, which was approved by the state Senate on Wednesday, January 5, will require remote retailers with online affiliates in the state acting as sales agents to collect and remit sales tax for purchases made by Illinois residents.

**Breaking News: As of press time, Bookselling This Week had learned that the Illinois House of Representatives passed HB3659. The legislation now goes to the Governor Quinn's office for his signature. The following article was written prior to the House vote.**

This week, in Illinois, legislation containing a sales tax fairness provision was introduced and was quickly – and overwhelmingly – passed by the state Senate on Wednesday, January 5. The bill, HB3659, moved to the House where it could be voted on as soon as today.

While just a few years ago media reports usually emphasized the uniqueness of online – and very often sales-tax-free – shopping, this year’s articles have a decidedly different tenor: A much greater percentage are pointing out the incongruities and inequities inherent in the failure to collect mandated sales tax.

The New York State Department of Taxation is hailing an appeals court’s recent decision that the state’s affiliate nexus law is, in fact, constitutional as a “major victory.”

The New York State appellate court has dismissed Amazon.com and Overstock’s claims substantively challenging the constitutionality of New York State’s sales tax fairness law. The decision represents a significant victory for proponents of sales tax equity.

Following a recent federal court decision and steps taken by the Texas Department of Revenue to collect sales tax that it contends is due from Amazon.com, a number of editorials have been published decrying Amazon’s refusal to collect sales tax.

The U.S. District Court for the Western District of Washington ruled this week that Amazon.com would not have to comply with the North Carolina Department of Revenue’s request for data revealing the identities of North Carolina customers and “detailed records of their purchases, including the expressive content.”

In mid-October, three booksellers and a representative from ABA met in Concord, New Hampshire, with the legislative director for Congressman Paul Hodes (D-NH) to express their support for the federal solution to online sales tax fairness, the Main Street Fairness Act.

The State of Texas has issued an assessment charging that Amazon.com owes the state some $269 million in uncollected sales tax, including interest and penalties, for the period from December 2005 to December 2009. Amazon.com reported the assessment in its September 30 quarterly filing with the SEC.

As California lawmakers and Governor Schwarzenegger haggled over a final state budget, one apparent casualty of the negotiation process was sales tax fairness. Despite the need to close a $19.1 billion budget gap, state Republicans insisted that the sales tax provision be removed, arguing that they would only agree on a "no-new-taxes budget."

On Wednesday, September 29, three Illinois booksellers testified on behalf of sales tax fairness legislation.

As budget talks heated up in California this week, ABA, NCIBA, and SCIBA urged their members in the state to call Gov. Arnold Schwarzenegger’s office to express support for sales tax fairness.

ABA has sent an e-mail urging its bookstore members nationwide to write to both their U.S. representatives and senators in support of the Main Street Fairness Act.

The Federal Tax Authority, a private company working to launch a service to assist online sellers in collecting and remitting local and state sales tax, has created yes5660.com, an online petition that consumers and retailers can sign in support of the Main Street Fairness Act.

ABA, NCIBA, and SCIBA have made available an op-ed in support of an e-fairness provision in California's proposed budget.