California Auditing Barnesandnoble.com Again
On April 29, Reuters reported that California tax authorities are auditing barnesandnoble.com to assess whether or not the retailer "improperly avoided collecting state sales tax on Internet sales," officials announced on Tuesday. "Our decision sends a message to national retailers: do not try to use the Internet as a tax haven for your California stores that constitute an eighth of our great nation's retail market," said Carole Migden, chair of the Board of Equalization, the state tax agency. For its part, Barnes & Noble, which has 84 stores across California, maintains that barnesandnoble.com does not have nexus in the state of California. Spokeswoman Carolyn Brown said that Barnesandnoble.com collects tax in the states "where we have a physical presence." Furthermore, she contended that Barnes & Noble and Barnesandnoble.com "are two entirely separate companies."
However, the Board of Equalization has assessed Barnesandnoble.com for back taxes in the past. In September 2002, the California Board of Equalization issued a Memorandum Opinion stating that Barnesandnoble.com was obligated to pay California back use taxes for a period of four-plus months -- from November 15, 1999, to March 31, 2000. The Board ruled that, because the bricks-and-mortar Barnes & Noble stores were offering customers coupons that discounted purchases made at its online store, Barnesandnoble.com had established a physical presence in the state of California, as reported by Bookselling This Week. (To read this article, click here.)
Unnamed Tennessee Litigant Files Suit Against Amazon
On April 25, Amazon.com Inc. announced that an unnamed private litigant in Tennessee had served the company with a complaint on March 27, alleging that the online retailer had failed to collect and remit sales and use taxes for sales of personal property to customers, as reported by the Wall Street Journal. The lawsuit, which was filed in Davidson County, also alleged that Amazon.com knowingly created records and statements falsely stating that it wasn't required to collect or remit such taxes. The lawsuit seeks injunctive relief, unpaid taxes, interest, attorneys' fees, civil penalties of up to $10,000 per violation, and treble damages under Tennessee's False Claims Act, the Journal noted. Amazon.com Inc. said it would fight the charges. Amazon.com's announcement came at its quarterly filing at the U.S. Security and Exchange Commission.