Barnes & Noble and ABA Join Again on Sales Tax Fairness [4]

With the status of federal sales tax fairness legislation muddied at best, the American Booksellers Association and Barnes & Noble are working together in support of state-level e-fairness advocacy. This week, ABA and B&N wrote to Republican Ohio Gov. John Kasich to call for a state sales tax fairness solution.

In the letter to Gov. Kasich, dated April 16, B&N CEO Michael P. Huseby and ABA CEO Oren Teicher wrote: “It is critical that Ohio level the playing field for Main Street retailers now. Our stores should not have to spend another year working at a disadvantage because some online retailers continue to shirk their obligation to collect sales tax. It is time to require that remote retailers collect and remit sales tax on purchases made by Ohio residents.” (Read the full text of the letter below. [6])

“While we continue to support the Marketplace Fairness Act in the Senate, and look forward to the introduction of U.S. Rep. Jason Chaffetz’s sales tax fairness bill, the bottom line is that individual states have realized that they have to take steps to address an inequitable situation,” said Teicher. “Our letter makes clear that sales tax inequity negatively impacts all Main Street stores, regardless of size. It is time for Ohio to level the playing field for bookstores in the state, a move that would send a clear message to leadership in the U.S. Senate and House of Representatives that e-fairness is a critically important issue that can’t be ignored.”

Huseby and Teicher pointed out that Amazon.com, for one, has clear nexus in the state and, as such, should be collecting and remitting sales tax to the state, just as Barnes & Noble and ABA member independent bookstores do. Compounding matters, Ohio provided an $81 million tax subsidy to an Amazon subsidiary, Vadata, Inc.

In their letter, they stressed: “Governor Kasich, sales tax fairness would save and create jobs in communities across Ohio. It would keep Ohio dollars in the state. Allowing the current inequity to continue unabated, while providing large remote retailers with tax subsidies, is bad for Ohio. And, as e-commerce continues to grow, the toll this inequity has on communities across the state will only increase, resulting in unavoidable budget cuts as well as lost jobs and revenue.”

This is the second time that ABA and B&N have joined to write in support of e-fairness legislation [7]. In September 2014, Teicher and Huseby wrote to U.S. House of Representatives Judiciary Committee Chairman Bob Goodlatte (R-VA) to urge that Congress not delay in passing e-fairness legislation in the closing weeks of that legislative session.


April 16, 2015

The Honorable John Kasich
Governor of Ohio
Riffe Center, 30th Floor
77 South High Street
Columbus, OH 43215-6117

Dear Governor Kasich:

We are writing on behalf of the American Booksellers Association (ABA) and Barnes & Noble Booksellers to express our strong support for sales tax fairness. Given the uncertain status of the passage of federal sales tax fairness legislation, we believe it is imperative for Ohio to level the playing field for Main Street retailers in the state. We strongly urge you to support sales tax fairness in Ohio.

The American Booksellers Association is the national, not-for-profit trade association of independent booksellers, and Barnes & Noble Booksellers is the leading U.S. retailer of books, digital media, and educational products and a Fortune 500 company. Barnes & Noble has a total of 649 retail stores and 717 college stores in Ohio and employs approximately 1,100 people in Ohio. ABA represents some 63 bookstores in Ohio and ABA stores jointly employ more than 170 people in the state.

Barnes & Noble and ABA are allied in our staunch support of sales tax fairness in Ohio, an issue that directly affects the state’s citizens.

According to a University of Tennessee study, in 2012 alone, Ohio lost more than $300 million in sales tax revenue due to uncollected sales tax from remote retailers that have clear nexus in the state via offices, warehouses, or online affiliates that act as sales agents. And, according to estimates from Governing.com, Ohio lost upwards of twice that much in 2012. Whichever estimate you choose, this lack of revenue negatively impacts Ohio’s residents and small businesses, and the communities in which they reside.

This is why it is critical that Ohio level the playing field for Main Street retailers now. Our stores should not have to spend another year working at a disadvantage because some online retailers continue to shirk their obligation to collect sales tax. It is time to require that remote retailers collect and remit sales tax on purchases made by Ohio residents.

Amazon.com, for one, has clear nexus in the state and, according to even the strictest interpretation of the Quill vs. North Dakota Supreme Court decision, it has a physical presence in Ohio. As such, it should be collecting and remitting sales tax to the state, just as Barnes & Noble and ABA member independent bookstores do. Unfortunately, the current reality is that Ohio instead benefitted Amazon’s operations in the state last year with a tax subsidy of $81 million to the company’s subsidiary Vadata, Inc.

We believe it is neither sensible policy nor sound economics for a state government to be in the business of picking and choosing winners — that is the role of the free market.

Governor Kasich, sales tax fairness would save and create jobs in communities across Ohio. It would keep Ohio dollars in the state. Allowing the current inequity to continue unabated, while providing large remote retailers with tax subsidies, is bad for Ohio. And, as e-commerce continues to grow, the toll this inequity has on communities across the state will only increase, resulting in unavoidable budget cuts as well as lost jobs and revenue.

We urge you to stand up for Main Street. Require remote retailers to collect and remit sales tax.

Sincerely,

Michael P. Huseby
Chief Executive Officer
Barnes & Noble, Inc.

Oren Teicher
Chief Executive Officer
American Booksellers Association