This week, 29 American Booksellers Association-member booksellers in New York State called on Governor Eliot Spitzer to enforce the equitable collection of sales tax. In a letter dated Wednesday, November 21, the booksellers stressed that, when out-of-state online retailers with clear nexus in the state via New York-based affiliations skirt tax laws, New York-based businesses lose sales as shoppers take advantage of tax-free shopping. The booksellers stressed that the situation is only compounded at holiday time. The booksellers' letter was a follow-up to the November 15 letter sent to Governor Spitzer by ABA CEO Avin Mark Domnitz.
"As we enter the holiday shopping season, we would like to point out that booksellers (and indeed all New York State businesses) are faced with an egregiously unfair business loophole -- one that continues to penalize businesses such as ours -- and that is the state's uneven enforcement of sales tax collection," the New York-based booksellers stated in the letter.
"Locally owned independent businesses like ours are the backbone of New York's economy," they continued. "Every analysis points to the fact that locally owned businesses -- particularly retailers -- have far greater economic impact on their communities; contribute more to local charities; and are largely responsible for our villages, towns, and cities retaining their unique characteristics. To undercut them by selectively deciding what laws to enforce and what laws to ignore is simply outrageous."
As of press time, the bookstores that signed the letter are: Bank Street Bookstore; Battenkill Books; Book Culture; Brownstone Books; Burlingham Books; Canio's Books; Chappaqua Bookshop; Creekside Books & Coffee; Flights of Fantasy Books, Games & Accessories; Gansevoort House Books; Here's a Book Store; Hobart International Bookport; Lift Bridge Book Shop; Longs' Cards and Books; The Lower East Side Tenement Museum; McNally Robinson Booksellers; Merritt Bookstore; Oblong Books & Music; Paperbacks Plus; Red Fox Books; Rizzoli Bookstore; Runaway Bay Books; St. Mark's Bookshop, Inc., Talking Leaves ... Books; the river's end bookstore; The Spotty Dog Books & Ale; Three Lives & Company; Village Books, and WORD.
Dear Governor Spitzer:
We the undersigned are following up on a letter sent by the American Booksellers Association on November 15, regarding your recent decision to abandon plans to equitably enforce existing tax laws by requiring out-of-state retailers with nexus in the state to collect sales tax. As we enter the holiday shopping season, we would like to point out that booksellers (and indeed all New York State businesses) are faced with an egregiously unfair business loophole -- one that continues to penalize businesses such as ours -- and that is the state's uneven enforcement of sales tax collection.
We believe you had it right the first time: The November 9 memorandum from the New York State Department of Taxation and Finance made clear that online retailers with affiliates in New York are required to collect and submit sales tax. This is clearly existing state law -- not a new tax of any kind -- and we urge you to rethink your position and enforce the law.
Locally owned independent businesses like ours are the backbone of New York's economy. Every analysis points to the fact that locally owned businesses -- particularly retailers -- have far greater economic impact on their communities; contribute more to local charities; and are largely responsible for our villages, towns, and cities retaining their unique characteristics. To undercut them by selectively deciding what laws to enforce and what laws to ignore is simply outrageous.
Importantly, we are in no way discussing any new "Internet taxes." We are simply urging you to untie the hands of your state taxing authorities and to allow them to enforce the tax laws already in place. Online retailers that have an indisputable presence in your state -- whether it's through a sales rep, a bricks-and-mortar store, or an affiliate relationship -- are no different than any other business within New York.
In contrast to the challenges that bricks-and-mortar retailers are grappling with this holiday season (including escalating gas prices and a weakening economy), a report recently predicted that online holiday sales will increase by some 18.5 percent this season for online retailers. In the report, Jeffrey Grau, a senior analyst for eMarketer, an online market research company, noted that this is "far superior to the low single-digit growth rate forecast for the overall retail industry this holiday season."
In such a retail climate, when such large out-of-state online retailers as Amazon.com -- that clearly have nexus in the state through their many New York-based affiliations -- skirt tax laws, New York-based businesses will lose sales as shoppers inevitably take advantage of tax-free shopping. In the end, New York's citizens are also losers, as potential tax revenue from both sources is uncollected -- monies that fund such essential services as schools and first responders.
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. We are not asking for special treatment. However, we are looking for their state government to enforce the laws uniformly and fairly.
Thank you for your consideration.
Bank Street Bookstore
Creekside Books & Coffee
Flights of Fantasy Books, Games & Accessories
Gansevoort House Books
Here's a Book Store
Hobart International Bookport
Lift Bridge Book Shop
Longs' Cards and Books
The Lower East Side Tenement Museum
McNally Robinson Booksellers
Oblong Books & Music
Red Fox Books
the river's end bookstore
Runaway Bay Books
St. Mark's Bookshop, Inc.
The Spotty Dog Books & Ale
Talking Leaves ... Books
Three Lives & Company
The Village Bookstore