On Wednesday, February 16, hearings on sales tax fairness bills were heard in Arizona, regarding HB2551, and in Vermont, regarding H.143. Both bills would clarify existing state sales tax laws to require remote retailers with a broad network of online affiliates in the state to collect and remit sales tax to the state for purchases made by residents of their states.
Gayle Shanks, of Changing Hands Bookstore in Tempe, Arizona, testified in support of HB2551, and Liza Bernard of The Norwich Bookstore, in Norwich, Vermont, testified in support of H.143. Also testifying in Arizona was Michelle Ahlmer of the Arizona Retailers Association (AZRA). In Vermont, ABA Senior Public Policy Analyst David Grogan and Content Officer Dan Cullen also offered testimony.
In Arizona, following the hearing, the Arizona House Commerce Committee voted 8 - 0 in favor of HB2551. HB2551 now moves to the state Senate. The Vermont hearing is still underway.
“We are very grateful to Gayle Shanks and Liza Bernard for taking time out of their busy schedules to testify in support of sales tax fairness,” said Oren Teicher, ABA CEO. “It really makes a powerful impact when legislators hear frontline reports on how sales tax inequity is negatively impacting Main Street retailers. By all accounts, both hearings were very successful, and we are pleased to hear that Arizona’s House Commerce Committee unanimously passed HB2551. We appreciate the lead that both AZRA and the Vermont Retailers Association have taken on this issue in their respective states. ABA will continue to strongly support them in their efforts to get sales tax fairness bills passed.”
Following the hearing, Changing Hands’ Shanks was clearly pleased with the hearing’s outcome. She told BTW the legislators had expressed concerns about Amazon.com’s actions in Texas, where the online giant has threatened to close down its distribution facility, and whether it would do the same thing in Arizona, where it has multiple facilities.
“I told the committee that I don’t think they can be bullied [by Amazon.com],” Shanks said. “If Amazon.com does not collect sales tax, then they are not paying their fair share – they are not paying for the roads that their trucks drive on when they leave their Arizona warehouse.”
Said Ahlmer via e-mail, “The hearing today was very successful…. When [opponents to the bill were] testifying, [Rep. Rick Gray (R)] queried as to how a business could realistically turn away from potential market share simply because of the requirement to collect.” Ahlmer added, “Gayle Shanks was instrumental in her testimony. Chairman Weiers threw some unexpectedly difficult questions her way and she handled them artfully!”
In Vermont, Norwich’s Bernard said that one big question was about use tax and the problems with getting consumers to declare and pay the use tax. “I explained that the … functionality of Vermont trying to collect a use tax was not really viable in my opinion,” she said.
Bernard explained that she had stressed to the committee that “we are not asking for a new tax, and ... it sounded like the lawmakers heard it in a new way during my [testimony].”
In his opening remarks, ABA’s Grogan noted, “Amazon.com has shown that it will go to extraordinary lengths to circumvent sales tax laws in an effort to maintain its unfair competitive advantage over Main Street retailers.”
And, while acknowledging that Amazon.com may indeed threaten to fire its Vermont affiliates, Grogan said that “far from inhibiting legislators from passing affiliate nexus laws, we believe Amazon.com’s actions are reasons why this legislation needs to be passed in Vermont and every other state where sales tax is collected and where there is no sales tax fairness law. Eventually, and soon, there will come a tipping point where Amazon.com can no longer afford to fire affiliates or pull out of states. They’ll have no place left to hide.”
Though unavailable to testify at yesterday’s hearing, Tasha Wallis, executive director of the Vermont Retailers Association, told BTW, “I think the hearing went well, there is tremendous support for doing something among the committee members…. We are also pleased that the former tax commissioner, who is now a Republican senator [Sen. Richard Westman], has a companion bill in the senate. His co-sponsor is a Democrat.”