The recent report Prime Numbers: Amazon and American Communities illuminated the repercussions of Amazon’s failure to collect and remit sales tax on its third-party marketplace sales. Now, booksellers are responding by asking their lawmakers to demand that third-party marketplaces collect and remit sales tax.
Prime Numbers, published by the American Booksellers Association (ABA) and Civic Economics on April 4, provides an analysis of the economic impact of Amazon’s retail operations in the United States. Prime Numbers estimates uncollected tax and quantifies the retail space and employment displaced by Amazon’s retail sales in the United States. The study is the first of its kind to incorporate the sales Amazon facilitates on its third-party marketplace in addition to its own sales. The report also includes a breakdown of this impact by state.
Kenny Brechner of Devaney, Doak and Garrett Booksellers in Farmington, Maine, described his reaction to Prime Numbers and the urgency for bricks-and-mortar retailers and their supporters to take action. “The report struck me as a stark reminder of the immediacy of this threat to our communities,” Brechner said. “Anyone who cares about the viability of traditional, in-person local commerce has a narrow window before irreversible damage occurs. Seeing the Amazon sales volume in Maine being at 490 million dollars was eye-opening. However, the 25 million in uncollected sales tax, given that Maine now collects from direct Amazon sales, definitely surprised me. It speaks to the volume of sales on the Amazon marketplace.”
Gayle Shanks of Changing Hands Bookstore in Tempe and Phoenix, Arizona, said that the report deepened her existing concerns. “It was scary, sad, and added to my worries about whether retail as we know it would be around after the next decade,” said Shanks. “We are already seeing so much retail space sitting empty; I can’t imagine what more will mean to communities. Also, given budgetary considerations, how states can possibly let the Amazon Marketplace get away without funding infrastructure, first responders, and, most importantly, schools, teachers, and education, is beyond me. The magnitude of the lost dollars just bowled me over. I knew it was bad, but how bad was beyond my comprehension until I read the report.”
In light of the information uncovered in Prime Numbers, ABA urged booksellers to take action by calling on their legislators to require online marketplaces to collect and remit sales tax. Template letters to legislators by state can be found in ABA’s Advocacy Action Kit.
Liza Bernard of Norwich Bookstore in Norwich, Vermont, has been speaking out about the non-collection of sales tax for online sales by making phone calls and writing letters to her legislators for years. She said that the issue is an important one for her store because “we need to level the playing field as much as possible and everyone should operate according to laws on the books.”
Shanks echoed these concerns. “A level playing field is the only way that any of us can stay afloat,” she said. “We need the cities where our stores are to be getting taxes that they desperately need and it isn’t fair that only customers walking into retail bricks-and-mortar stores pay these taxes. Anyone who buys in a state that collects sales tax should be paying, whether in a store or online.”
Brechner wrote to his legislators using ABA’s template letters, highlighting the necessity of leveling the playing field with online retailers like Amazon on multiple levels. “Apart from directly competing with Amazon for our book sales,” he noted, “there is the fact that I need to have merchant neighbors here in downtown Farmington. As more of my neighbors are displaced, it makes it that much harder for us to carry on, not to mention the loss of the fabric and character of our downtown. This is an urgent matter, and we need to act accordingly.”