Power to the Booksellers: Building Coalitions to Win the Fight for E-Fairness

On Tuesday, May 25, during ABA's Day of Education, sponsored by Ingram,  30-plus booksellers gathered for the early-afternoon session "Power to the Bookseller," focusing on sales tax fairness. The session featured ABA CEO Oren Teicher and Jim Sherin, president and CEO of the Retail Council of New York (RCNY), as well as reports from booksellers Fran Keilty and Jonathon Welch about their advocacy efforts and suggestions for fellow booksellers.

Both Teicher and Sherin provided attendees with an update on the state-by-state e-fairness fight and offered concrete advice for articulating the sales tax equity message -- including how to reach out to key legislators and how to build a coalition of local indie retailers and other supporters.

Kicking off the session, Teicher explained that sales tax fairness is something "we've been fighting over now for many, many years. What we've said, simply, is that the government ought not be in the business of picking favorites."

By not enforcing current sales tax laws and requiring remote retailers with nexus in the state via online affiliates, offices, or warehouses to collect and remit sales tax, states are essentially subsidizing the competition, Teicher noted. And this results in a huge competitive advantage. "In California, where sales tax approaches 10 percent, this is a 10 percent competitive disadvantage for retailers in the state," he explained.

Acknowledging that the campaign for e-fairness has continued for some years, Teicher urged that booksellers stay energized and persistent. "We have had success -- in New York, in Rhode Island, in North Carolina, and partially in Colorado," he said. "In addition, sales tax fairness laws were passed in a number of states only to be vetoed by their governors." While ABA believes a federal solution would be the best solution to the critical challenge of sales tax inequity, in the absence of a federal solution, the association has approached the issue on a state-by-state basis, which, Teicher said, ABA believes will, in the long run, strengthen the prospects of a federal solution.

While opponents of sales tax fairness -- such as Amazon.com, Overstock.com, and the Performance Marketing Association, which represents the interests of online affiliates -- have attempted to mischaracterize sales tax fairness enforcement a "new tax" or "advertising tax," Teicher emphasized that "the [New York] law does not create a new tax" and added that "Amazon and others are pitting retailers against retailers. Price matters and sales tax represents a significant price advantage."

Politics can make for strange bedfellows, Teicher continued, and the battle for sales tax fairness is no exception. "We are working with Barnes & Noble, Sears, Wal-Mart, and Federated Department Stores," he said. "But we can't win this fight on our own. We need to build coalitions. Help us and we can win it. This November presents us all with an opportunity to weigh in with new governors and legislators. We need to make the most of that. Booksellers underestimate their ability to affect change."

In his introduction of RCNY's Sherin, Teicher noted that Sherin and his team were instrumental in the passage of e-fairness legislation in New York State.

Sherin began by providing a recap of the campaign for e-fairness in New York State before providing a picture of the current sales tax fairness landscape. "We were the first state to pass an e-fairness law," he said. "It was very instructive. New York is not usually first in most things -- most good things, at least." The law was proposed in January 2008 and passed in the state budget in April of the same year, which was a quick turnaround and not normally the case for most bills.

A key reason for its passage, Sherin continued, was that New York was in the middle of a fiscal crisis. "The worse shape a state is in fiscally, the better chance sales tax fairness will win," he explained. "This is a revenue-driven issue." However, booksellers lobbying for sales tax fairness should be warned: "Legislators will say it's a new tax -- you'd think they would know better. And consumers think the Internet is tax free. So it's difficult to convince a legislator that it's not a new tax."

One thing that helped the New York campaign was that "Amazon.com didn't have their game face on yet," Sherin said. "They were caught unaware," which, he noted, is no longer the case.

While the road to sales tax fairness presents a challenging road ahead, "I agree with Oren that it is doable," Sherin told attendees. "States are looking under every rock for every dollar. You must be patient, persistent…. Anything you can do: letters to the editor, Facebook, and Twitter."

After Sherin's presentation, attendees heard a few words from two booksellers who have been active in ABA's campaign for e-fairness: Fran Keilty of Hickory Stick Bookshop in Washington Depot, Connecticut, and Jonathon Welch of Talking Leaves in Buffalo, New York.

Keilty, who attended a committee hearing in Hartford, Connecticut, in support of a sales tax fairness bill (one that was ultimately tabled in early May), stressed that the e-fairness materials provided by ABA in its online E-Fairness Action Kit were very helpful. "I plan to build coalitions" in the hopes of moving the bill to passage in the next legislative session, she said.

Welch urged attendees to reach to customers who might be helpful in the campaign. "Most of us do have customers with connections," he said. In general, "ABA provides materials that make it very easy to [contact legislators and the press]."

The session ended with a lively Q&A session, which reinforced the importance of coalition building, as well as how crucial it is that booksellers find the time to meet with their legislators in person and attend state legislative hearings on e-fairness legislation.