Advocacy

Minneapolis Star Tribune Editorial -- February 27, 2003, www.startribune.com

Taxing Sales -- Include Internet, Telephone, Catalogs

When it comes to collecting sales taxes on retail purchases, there now are four classes of retailers.

There should only be one.

Independent booksellers, including Kepler's, protest state's tax system

By David Boyce
Almanac Staff Writer

There is still time for booksellers to add their names to an ABA letter calling on U.S. governors in the 45 states that collect sales tax to enforce existing tax regulations by making sure that retailers with a physical presence in their states collect sales tax on online sales. Hundreds of booksellers have already added their names to the letter, but ABA is looking to include the signatures of as many ABA member stores in these states as possible.

Hundreds of booksellers nationwide have signed on to an ABA letter calling on U.S. governors in the 45 states that collect sales tax to enforce existing tax regulations by making sure that retailers with a physical presence in their states collect sales tax on online sales. Close to 300 booksellers have already responded to an e-mail last week from ABA COO Oren Teicher about the communications effort.

The citywide book club trend, which began in Seattle six years ago, continues its remarkable popularity, with new community-reading initiatives sprouting up around the nation at an amazing pace. When BTW first published a listing of citywide book club initiatives in March 2002, there were 45 community-reading events listed. Eleven months later, the number has almost tripled, and now lists 124 cities, counties, or states that have organized (or are organizing) events that encourage communities to read the same book at the same time.

This week many booksellers nationwide received an e-mail from ABA COO Oren Teicher regarding the American Booksellers Association's efforts to achieve greater equity regarding the collection of sales tax on online sales. The e-mail noted the letter that ABA recently sent to the U.S. governors in the 45 states that collect sales tax. In that letter, ABA again called on states to fully enforce existing regulations by ensuring that retailers with a physical presence in their state collect sales tax on online sales.

The troubling effects of falling tax revenues continue to multiply for elected officials facing rapidly growing deficits. Forty-one states collected less revenue in fiscal 2002 than they had planned for in their budgets. Nationwide, sales tax collections were 3.2 percent lower than originally budgeted, personal income tax collections missed states' targets by 12.8 percent, and corporate income taxes were 21.5 percent lower than projected.

The American Booksellers Association has once again called on the U.S. governors in the 45 states that collect sales tax to fully enforce existing regulations by ensuring that retailers with a physical presence in their state collect sales tax on online sales.

Representatives from 31 states and the District of Columbia approved, on November 12, a proposal to simplify and to modernize sales and use tax administration. The states are part of the Streamlined Sales Tax Project (SSTP), a national initiative seeking to improve sales and use tax collection, especially for online commerce. The plan incorporates uniform definitions within states' and local governments' tax bases, simplified audit and administrative procedures, and improved software to help reduce the burden of tax collection.

The Citywide Book Club trend, which began in Seattle six years go, shows no sign of slowing down. When Bookselling This Week first created its Citywide Book Club list in March 2002, there were 45 known community-reading initiatives. Seven months later, the number has more than doubled, and now lists 94 cities, counties, or states that have organized (or are organizing) events that encourage communities to read the same book at the same time.

ABA's Prescription for Reading is in full swing, and booksellers who spoke to BTW reported that they are having great success with this year's program. "We started out with 200 books [for the program]," said Lee Kimball, manager of The Library Shop in Richmond, Virginia. "We ended up having to order another 1,000 more."

On Thursday, September 12, the California Board of Equalization (BOE) issued a Memorandum Opinion stating that Barnesandnoble.com was obligated to pay California back use taxes for a period of four-plus months -- from November 15, 1999, to March 31, 2000. BOE ruled that, because the bricks-and-mortar Barnes & Noble stores were offering customers coupons that discounted purchases made at its online store, Barnesandnoble.com had established a physical presence, or nexus, in the state of California.

Throughout the U.S. this month and next, the importance of reading is taking center stage as 22 State Centers for the Book help to promote the upcoming National Book Festival, to be held in Washington, D.C., on Saturday, October 12, 2002. In Arkansas and Minnesota, state Centers for the Book are doing this with help from independent booksellers.

ABA has announced that the successful Prescription for Reading program will be expanding to include a number of other organizations providing services for children. These include daycare centers, preschools, nursery schools, independent pharmacies, local Y's, day camps, senior citizen centers, or any organization that serves parents or grandparents of young children.

On July 25, First Lady Laura Bush and Librarian of Congress James H. Billington announced that the second National Book Festival would be held in Washington, D.C., on Saturday, October 12, 2002. "America was transformed three days after the first National Book Festival was held September 8, 2001," Mrs. Bush said in a statement. "But one thing that did not change was our love of spending time with friends and family -- especially our children.