This week many booksellers nationwide received an e-mail from ABA COO Oren Teicher regarding the American Booksellers Association's efforts to achieve greater equity regarding the collection of sales tax on online sales. The e-mail noted the letter that ABA recently sent to the U.S. governors in the 45 states that collect sales tax. In that letter, ABA again called on states to fully enforce existing regulations by ensuring that retailers with a physical presence in their state collect sales tax on online sales.
ABA would now like to resend the letter to the 45 governors -- and other appropriate state authorities in those states -- with the signatures of as many ABA member stores in these states as possible. Booksellers who would like to add their names to the letter should e-mail Kristen Gilligan at email@example.com with the following information:
Store Name _____________________________________________
Owner (or contact) _______________________________________
ABA hopes to send the letters within the next few weeks; please, respond no later than January 20.
In addition to the letter [click here], ABA has also prepared an op-ed piece on the issue, which is available below. The piece explains why it's important for state governmental leaders to take steps to ensure that there is a level playing field for all retailers selling online.
By not enforcing existing sales tax regulations uniformly, states officials are allowing some national chains with a physical presence in these state to avoid collecting sale tax for online sales. The problem is compounded by the growing deficits states face, even as a number of services face budget cuts.
Booksellers can use this piece under their names exactly as it is, or edit it as they'd like.
[Sample Op-Ed Piece -- January 2003]
Now's the Time to Treat All Online Retailers Equitably
In what was a challenging holiday season for many retailers, one group of merchants is surely smiling as 2003 begins. For online retailers, business has been great. The number of U.S. households with Internet access that have purchased gifts online jumped by 19 percent, and analysts now expect holiday sales to show a sales growth of between 30 to 35 percent, reaching $13.1 billion.
Our state will be seeing very little upside from this Internet bounty, however. The reason is that a number of national retailers with a physical presence within our state continue to flout the law by not collecting sales tax on the sales made by their e-commerce operations, even as states face the most dire fiscal challenge since World War II.
With the disingenuous contention that they do not have a physical "presence" in our state, these online scofflaws are hiding behind the facade of "separate" Internet companies -- even as they work hand in glove with their bricks-and-mortar stores, offering customers a seamless shopping experience. As a result, these national chains refuse to collect sales tax on their online sales, and, in doing so, continue to unfairly penalize our state's independent businesses' e-commerce initiatives. More importantly, their refusal to obey state regulations is further contributing to a sea of red ink in our growing state deficit.
Make no mistake: This is not a call for new "Internet taxes." Rather, it's a challenge to state leaders to equitably enforce current state tax regulations. The "bricks-and-clicks" corporate strategy employed by many national chains clearly establishes a physical presence in our state. As a result, they should be held to the same standard as any other retailer.
Governments should never be in the business of playing favorites among retailers, and to do so now will only compound a growing state fiscal crisis. As the National Governors Association has noted, despite significantly curtailing state spending, 37 states were forced to reduce their enacted budgets by about $12.8 billion in fiscal 2002. About mid-way through the current fiscal year, 23 states plan to reduce their net enacted budgets by more than $8.3 billion.
Clearly, falling tax collections are handicapping our state's efforts to serve citizens. Nationally, in fiscal 2002, sales tax collections were 3.2 percent lower than originally budgeted, personal income tax collections missed states' targets by 12.8 percent, and corporate income taxes were a staggering 21.5 percent lower than projected. Forty-one states collected less revenue in fiscal 2002 than they had planned for in their budgets.
When companies dodge their legal responsibility to collect sales taxes, they are siphoning money away from such essential local services as policing, fire fighting, and schools. Over the past few years, the problem has only grown worse, as more e-commerce companies that fail to collect sales tax compete unfairly, driving more consumers online because of an unfair playing field.
The independent booksellers of [STATE NAME HERE] -- and other independent retailers -- are not asking for special treatment. However, we are looking for our state government to enforce the laws uniformly and fairly.
It's time for our state leaders to take concrete steps to end this discriminatory enforcement of existing law and require all retailers -- whether they operate online, in physical stores, or in some combination of both -- to start to fulfill their obligation to collect sales taxes.
[BOOKSELLER BIO HERE]