ABA President Ann Christophersen
In a letter dated May 22, sent on behalf of ABA member bookstores, ABA President Ann Christophersen once again urges the state governors and other elected officials in the 45 states that charge sales tax to immediately take steps to enforce state tax laws fairly and uniformly. Christophersen calls on the governors to charge sales tax for online purchases made within their states, and adds, "We know you agree that the issue of billions of dollars of uncollected sales tax needs to be a top priority."
Over recent months, the Streamlined Sales Tax Project (SSTP) -- a national effort looking to simplify how tax is collected from out-of-state retailers -- has spurred some confusion regarding the issue of online sales tax collection, both in the media and among a number of state taxing authorities. In her letter, Christophersen stresses, "[T]he issue we have been raising is slightly different [from SSTP]. We remain very concerned about the collection of sales tax for sales made within the state, and we are referring to tax laws already in existence."
The letter continues: "We believe that the laws in your state need no clarification -- online retailers that have an indisputable physical 'bricks-and-mortar' presence in your state are no different than any other business within your state. When any business, or any online business that has a physical counterpart within the state, makes a sale to a customer within that state, they are required by law to collect sales tax.
"As such, your state can enforce your existing tax laws with regards to online retailers now -- without passing a new law or changing an existing one."
Christophersen also takes aim at the idea that taxing the Internet would hinder its growth. A recent report issued by Jupiter Research, "Sales Tax: Avoidance is Imperative to Few Online Retailers and Ultimately Futile for All," indicates that collecting sales taxes on Internet retail transactions conducted across state lines would not impede the growth of online retail. Ken Cassar, Jupiter Research senior analyst, notes that only nine percent of consumers actually make merchant selection decisions based upon whether or not that retailer charges sales tax.
Other retailers make the claim that their online store is different from their "bricks-and-mortar" store. Christophersen asks the governors to dismiss this notion. "A quick look at their business models reveals this to be patently untrue. For example, purchases made online from many retailers may be returned for credit to the bricks-and-mortar locations of these companies. This is the case with barnesandnoble.com and Barnes & Noble retail stores. If that is not nexus, what is?"
The letter concludes: "It bears repeating: We are not asking for a new Internet tax law. We are simply asking you to enforce your existing tax regulation. We urge you to start collecting online sales tax from online retailers with nexus in your state."
To read the full text of the letter, click here.