Barnes & Noble has joined the American Booksellers Association in supporting sales tax fairness by urging Congress not to delay in passing e-fairness legislation in the closing weeks of this legislative session.
In a letter to U.S. House of Representatives Judiciary Committee Chairman Bob Goodlatte (R-VA), dated September 4, 2014, B&N CEO Michael P. Huseby and ABA CEO Oren Teicher wrote: “Barnes & Noble and ABA are allied in our staunch support of federal sales tax fairness legislation…. We do stress, however, that it is imperative that a bill be introduced soon. We simply cannot wait for another legislative session to address an issue that is crucial for both small and large retailers alike.” (Read the full text of the letter below.)
“We are pleased that Barnes & Noble has joined independent booksellers in this important call on behalf of sales tax fairness,” said Teicher. “Our letter makes clear that sales tax inequity negatively impacts all Main Street stores, regardless of size. It is crucial that Chairman Goodlatte and Congress recognize that the time to act is now: Brick-and-mortar stores should not have to face yet another holiday season with an unlevel playing field.”
In mid-July, the Marketplace and Internet Tax Fairness Act (MITFA), which authorizes states to pass e-fairness legislation requiring remote retailers to collect and remit sales tax, was introduced by Senators Mike Enzi (R-WY), Dick Durbin (D-IL), Lamar Alexander (R-TN), Heidi Heitkamp (D-ND), Susan Collins (R-ME), and Mark Pryor (D-AR). MITFA combines the Marketplace Fairness Act (MFA) with the House-passed Permanent Internet Freedom Act (PITFA), which prohibits states from taxing access to the Internet.
It is expected that the Senate will take up MITFA once it returns from recess on Monday, September 8. If MITFA passes the Senate, it will then have to be reconciled in conference committee with the House version of the bill. At that point, it is unclear whether opponents of the MFA amendment would attempt to remove it from the legislation.
Meanwhile, in the House, Congressman Jason Chaffetz (R-UT) is drafting sales tax fairness legislation. It is still unclear when Rep. Chaffetz will introduce his e-fairness bill.
In their letter to House Judiciary Committee chair, Huseby and Teicher stressed: “[W]e find it unconscionable that the current system is providing out-of-state e-commerce retailers with an unfair sales tax advantage at the expense of their in-state stores. Main Street retail stores give back to their communities in ways that out-of-state retailers do not: We provide local jobs; we employ local services; we remit sales tax revenue that pays for roads and first responders, among other services; and perhaps most important, bookstores are often a community gathering place for their local communities, offering events and education for children and adults alike.”
The Honorable Bob Goodlatte
Chairman, Committee on the Judiciary
United States House of Representatives
Washington, D.C. 20515
Dear Chairman Goodlatte:
We are writing on behalf of the American Booksellers Association (ABA) and Barnes & Noble Booksellers to express our strong support for sales tax fairness. We strongly urge Congress to pass sales tax fairness legislation in this legislative session.
The American Booksellers Association is the national, not-for-profit trade association of independent booksellers, and Barnes & Noble Booksellers is the leading U.S. retailer of books, digital media, and educational products and a Fortune 500 company. Barnes & Noble has a total of 51 stores in Virginia, including eight bookstores in Virginia’s 6th District. Of the 51 total bookstores, 28 are owned by Barnes & Noble Booksellers, Inc (4 bookstores in the 6th District) and 23 are owned by Barnes & Noble College Booksellers, LLC (4 bookstores in the 6th District). In total, Barnes & Noble employs approximately 1,500 people in Virginia and approximately 270 in the 6th district. ABA represents some 33 bookstores in Virginia, including six bookstores in Virginia’s 6th District. ABA stores jointly employ more than 100 people in Virginia and more than 20 people in the 6th district.
Barnes & Noble and the ABA are allied in our staunch support of federal sales tax fairness legislation, including the Marketplace and Internet Tax Freedom Act, currently being considered in the U.S. Senate.
We are also pleased to hear that Congressman Jason Chaffetz is drafting legislation that will level the playing field for all merchants by allowing states to require legally owed sales and use taxes to be collected by retailers without imposing unnecessary burdens on remote sellers. We do stress, however, that it is imperative that a bill be introduced soon. We simply cannot wait for another legislative session to address an issue that is crucial for both small and large retailers alike.
Sales tax fairness is about who collects a tax that is already owed. Should sales tax be collected by each consumer via use tax (at risk of an audit from their own state) … or should it be collected by the retailer at point-of-sale (something that brick-and-mortar stores’ point-of-sale systems do seamlessly every day)? Obviously, the best and most efficient way to collect sales tax is at the point of sale.
Sales tax fairness would not institute a new tax, nor would it burden small businesses with extra tax paperwork. It is about states’ rights, protecting and creating jobs, and putting an end to state governments subsidizing out-of-state online retailers at the expense of in-state Main Street stores by allowing them to enjoy special sales tax law loopholes.
As e-commerce grows, sales tax revenue in states has declined as many consumers buy online not realizing that they owe a use tax. And for state revenue departments, it is very tough to enforce use tax laws to recoup that lost revenue. One unfortunate by-product of this situation is that now some states are increasing their efforts to collect use tax, going so far as to warn consumers of the possibility of an end-of-the-year audit if they do not submit use tax to the state for out-of-state purchases.
Sales tax fairness legislation would allow states to recoup this lost sales tax efficiently and would level the playing field so that government would not be choosing the winners and losers — the free marketplace would.
Moreover, we find it unconscionable that the current system is providing out-of-state e-commerce retailers with an unfair sales tax advantage at the expense of their in-state stores. Main Street retail stores give back to their communities in ways that out-of-state retailers do not: We provide local jobs; we employ local services; we remit sales tax revenue that pays for roads and first responders, among other services; and perhaps most important, bookstores are often a community gathering place for their local communities, offering events and education for children and adults alike.
Chairman Goodlatte, our stores and other retailers should not have to face another holiday season without a solution to this problem. The time has come to act. The solution is clear, so let’s delay no longer. The failure to act will have a massive impact on the overall American economy, with the possible loss of thousands and thousands of retail jobs.
Undoubtedly, the best way to address sales tax inequity is through federal legislation that levels the playing field while establishing important protections for businesses and consumers; legislation that will ensure a healthy and competitive marketplace for decades to come.
We understand that a hybrid-origin sourcing model, which was discussed at the March Committee hearing on sales tax fairness, is still being considered. In our opinion and based on our experience in collecting sales tax in many different jurisdictions, we believe a model based on origin or hybrid-origin sourcing would be simply unworkable. Not only would it overturn the use tax laws in 45 states, under this solution, out-of-state retailers in non-sales tax states and in foreign countries could legally sell tax-free to consumers in all states.
Thank you for your leadership on this important issue. And, if it would be at all helpful, we would welcome the opportunity to meet with you at your convenience in Washington to discuss this issue.
Michael P. Huseby