ABA Calls on B&N and Amazon.com to Join Fight for E-Fairness

Last week, ABA CEO Avin Mark Domnitz sent letters to Steve Riggio, the CEO of Barnes & Noble, Inc., and Jeff Bezos, the founder and CEO of Amazon.com, in which he encouraged them to join the American Booksellers Association and other retailers in the fight for e-fairness. Noting that while ABA and the two retail giants have often been on opposite sides of various issues, Domnitz stressed that there have been instances when the companies have "worked together toward important common goals, most notably those involving the First Amendment and free expression," the results have been significant and "all booksellers benefited."

On February 6, Bookselling This Week reported [1] that Barnes&Noble.com is now collecting online sales tax in 38 states. Since its inception, B&N has been collecting sales tax on online orders in New York and New Jersey, where it has offices and a company warehouse. It has also been collecting online sales tax in Tennessee and Nevada since 2000, when it opened additional warehouses. The company website currently notes, "In accordance with applicable law, Barnes&Noble.com collects tax in all but the following states: Arizona, Hawaii, Louisiana, Maine, Mississippi, New Mexico, Vermont, and the District of Columbia." States that have no sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon.

In his letter to Riggio, dated February 8, 2006, Domnitz wrote: "We believe Barnes & Noble's decision to significantly increase the number of states where you are collecting sales tax on relevant online sales offers another key opportunity to work together. For some time now, ABA and its member stores have been working with the members of the E-Fairness Coalition to support a level playing field that ensures consumers are treated fairly no matter where they shop, be it online or in bricks-and-mortar stores. The coalition represents over 350,000 retail stores nationwide."

"As you have pointed out in the past," Domnitz continued, "it's essential that booksellers work together to strengthen book sales in bookstores. ABA and its members believe that making sure no one sales channel is given preferential treatment from government is a very important fight."

Domnitz's letter to Bezos was sent in response to comments made by Paul Misener [2], Amazon.com's vice president for global public policy to the U.S. House of Representative's Small Business Subcommittee on Regulatory Reform and Oversight on February 8 in which he said that collecting sales tax on online purchases is within the industry's capabilities.

While Misener told the subcommittee that Amazon.com did not have an official position regarding the nationwide collection of sales tax for online purchases, he stated that his company "concluded almost six years ago, however, that it certainly would be reasonable for policymakers to decide that the tax should be collected by sellers. We also concluded that Amazon would not be hurt by a sales tax collection requirement, so long as the administrative burdens of collection were eliminated and that our online competitors also would be required to collect."

In his letter to Bezos, dated February 10, 2006, Domnitz noted that, in light of Misener's testimony, "that it would be reasonable to collect sales tax on online sales -- and that it is within the industry's capacity -- we believe that there is another key opportunity to work together."

"As you know," Domnitz wrote, "millions and millions of dollars in book sales continue to go untaxed on the internet, a loss that denies state and local governments badly needed funds to support crucial services."

Concluding both letters, Domnitz noted that the E-Fairness Coalition has made significant progress regarding equitable sales tax collection, "but many important issues remain unresolved. I urge you to join us in this fight, and, I'd welcome an opportunity to discuss this with you in detail at your convenience." --David Grogan [3]