MAIN NEWS HEADLINES
April 17 – April 24, 2008 Edition

Booksellers Elated

Over Internet Tax Law

Passage in New York

NEW YORK, NY/4/12/08–The American Booksellers Association last week praised the New York State Legislature for passing an Internet Sales Tax provision, that requires out-of-state retailers such as Amazon.com to collect and remit taxes on sales to state residents. Governor David Paterson is expected to sign the budget containing the provision by April 20.

Once the bill has been signed, the tax becomes immediately effective, though out-of-state retailers will have until June 1, 2008 to comply without penalty. Amazon.com, which vigorously opposed the bill, has not commented on its passage. Amazon and other critics, along with some supporters, expect legal challenges. They say a 1992 US Supreme Court ruling prohibits a state from forcing a company with no physical presence in a state from collecting the state’s sales tax. The new law is expected to generate about $47 million in additional taxes for New York.

Though Amazon.com is likely to challenge the legality of the provision, booksellers are elated. Their comments were posted on the ABA’s website this week.

"New York booksellers should be immensely proud of what they have helped accomplish," said Oren Teicher, ABA COO. "Together with the New Atlantic Independent Booksellers Association, other independent retailers, and our friends at the Retail Council of New York, we helped change the context of the debate and convince both the governor and the assembly to support our position. Make no mistake, the inclusion of the Internet Sales Tax provision in the final state budget is more than a victory for New York’s independent retailers — it is a victory for all independent retailers. The victory here will bolster the fight for e-fairness elsewhere, as we continue to work with booksellers and allies in other states."

James Sherin, president and CEO of the Retail Council of New York State, lauded Gov. Paterson and the state legislature for standing up for the state’s bricks-and-mortar Main Street merchant community. "The is a first step — but a critical one — in our ongoing struggle to level the sales tax playing field between New York retailers and the out-of-state Internet giants that have, for years, capitalized on an unfair and unintended competitive advantage driven solely by tax policy," said Sherin. "This is not a new tax. It simply creates a realistic structure and framework to allow for the appropriate collection of a levy that has been on the books for more than 40 years."

"I am pleased that our bookseller members took time during their busy December rush, and then again this past month, to write their legislators — their efforts clearly had a big impact on this issue," said Eileen Dengler, NAIBA executive director. "NAIBA member Susan Novotny of Book House of Stuyvesant Plaza, in the Albany area, was especially instrumental, walking the halls of the capitol to explain the impact of this tax on Main Street merchants."

With the passage of the budget, New York State takes a significant step in establishing a level playing field for the state’s retailers, a policy decision that is likely to be closely watched in other state capitols.

The victory is the culmination of months of intense lobbying by New York’s independent booksellers and the American Booksellers Association, a campaign that included letters, e-mails, phone calls, and personal visits to legislators in Albany, the state capital. ABA’s efforts included coordinating lobbying activities with other associations representing independent retailers in New York and working closely with NAIBA and the Retail Council of New York, which played a crucial role in face-to-face discussions with key elected officials in Albany.

Along with ABA, those independent trade groups that helped with the campaign for e-fairness included the American Specialty Toy Retailing Association, the Coalition of Independent Music Stores, the Independent Florist Association, the National Association of College Stores, the North American Retailer Dealers Association, and the National Bicycle Dealers Association.

New York State booksellers who spoke with Bookselling This Week were elated with the news.

"We were delighted to see it passed," said Susan Fox of Red Fox Books in Glen Falls, New York, who sent letters to state senator Betty Little (R-Queensbury) and assembly member Teresa Sayward (R-Willsboro). "We communicated with Sen. Little and she was a supporter of the provision; and Assemblywoman Sayward told me she had been unaware that retailers were concerned with this issue, so we were happy to educate her on that point. We’re a redeveloping mill town, so sales tax is vital to us. This provides more incentive to shop locally and it might help people’s awareness regarding the value of independent businesses."

"It’s nice when the process works," Kelley Drahushuk of Spotty Dog Books & Ale in Hudson, New York. "All we are asking for is a level playing field, and I’m glad the government stood up for us. Local businesses offer a greater contribution to the economy than out-of-state retailers. We are only asking for what is fair."

Chris Doeblin of Book Culture in New York City told BTW via e-mail, "This fantastic victory is a bellwether of a new era — an era in which old virtues of community and diversity are retaking precedence over the destructive view that bigger is better. For our store it creates a huge impetus to for customers to shop here, and use bookculture.com for ordering, [as opposed to] Amazon.com."

Other states have monitored events in New York and may now move to establish similar sales tax provisions.