Oren Teicher, president of the American Booksellers Association, presided over a discussion of the renewed effort to create a sales tax fairness law in California yesterday at the spring meeting of the Southern California Independent Booksellers Association at the Marriot Hotel in Manhattan Beach. “We’re getting there,” Teicher told a packed room of booksellers. “We’re at the point where the battle has been tipped over to our side.”
Although California has come close in the past to pushing a law through that would force Amazon and other e-tailers to start collecting sales tax, the bill was vetoed by the last two California governors when it reached the desks of Gray Davis and Arnold Schwarzenegger (current Governor Jerry Brown remains uncommitted on the issue). “As unfortunate as the colossal deficits in California and many other states may be, this economic climate has really shifted the debate, which is a good thing for us,” said Teicher. “State governments are beginning to understand how this tax can subsidize their budgets in a profound way.”
Three new bills have recently been introduced in the California legislature by State Assembly member Nancy Skinner and Senators Ron S. Calderon and Loni Hancock, which will be put to the vote this year. Skinner’s bill challenges the Supreme Court’s Quill ruling of 1992 that states online retailers who do not have a nexus – a physical presence in a state – are not required to collect sales tax. Amazon has four warehouses in California, where indie booksellers realize approximately $209 million annually in sales and collect more than $15.1 million in sales tax, yet are threatened daily by the consumer’s preference to buy books online tax-free.
“New York passed a fair tax legislation two years ago, and since then 16 new bookstores have opened there,” said Teicher. “Another 18 or 19 states now have similar bills going through their legislatures. Barnes & Noble, Wal-Mart, and Target, as well as lots of other industries have joined us in our efforts. The ABA is now in partnership with virtually every other retailer on this issue, and with so many new allies we finally have some wind behind our sails.”
But Teicher cautioned booksellers against complacency. “It’s up to you now to help make this happen. You have to let your representatives in Sacramento know how critical this is to your survival.” Teicher distributed packets of material designed to help the SCIBA member stores write appropriate letters, backed with information about the relevance of indie bookstores in California in terms of both employment and tax revenues. One of the key points the letters should contain is that there is a real threat that local taxes will be raised if potential sales tax revenues continue to go uncollected. Teicher also offered a lobbying tip: if a bookseller’s home and store are in two different congressional districts, they can send letters to both representatives.
Diesel Books’ John Evans raised the question of engaging consumers in the fair tax fight. “This is a very complicated issue,” Teicher noted, “but if you feel it would be effective you can download all the materials from the ABA site and distribute them to your customers and other retailers.” He strongly encouraged the booksellers to engage their indie retail neighbors in the lobbying efforts, because the passage of even one of the three bills in the California legislature would allow local businesses to compete on a level playing field.
Although the online tax issue doesn’t seem to fit the traditional political boundaries, with many conservatives supporting it, Teicher cited Republican George Runner, who is on California’s five-member Board of Equalization, as but one source of “the anti-government, anti-tax mentality” that the ABA and its members are up against in this latest effort to squash Amazon’s advantage over independent retailers. “The opposition is well organized and very well funded,” Tucker said. “They wield a lot of power over their affiliates, and don’t hesitate to break their contracts with them in the six states where Amazon now has to collect taxes.” With this kind of formidable business leverage looming over the indies, it’s understandable that Tucker concluded his presentation by saying, “You know what you have to do. Write those letters to your legislators. California will set the stage for what happens everywhere.”