Virginia Moves Closer to E-Fairness; More States Introduce Sales Tax Equity Bills

This week, the Virginia State Senate voted overwhelmingly to pass e-fairness legislation, while senators in Maryland and Illinois introduced bills that would bring about sales tax equity for thousands of retailers in their states. In addition, legislators in California appear to be moving closer to bringing about e-fairness in the state. And, in Colorado, members of the State House of Representatives passed a uniquely amended version of sales tax legislation that looks to focus on consumer use tax compliance, and it is expected that Gov. Bill Ritter will sign the bill into law.

In Virginia, observers noted a key factor in the State Senate passage of the e-fairness bill was the active advocacy on the bill's behalf by Main Street retailers, including independent booksellers.

ABA CEO Oren Teicher noted that "through their letter-writing and testimony, the retailers clearly showed the Senate how important the issue of sales tax equity is to their businesses and to the welfare of their state."

Pointing to the results in Virginia, Teicher said, "This experience reminds all of us that there is no effective substitute for the strong involvement of booksellers on this issue," and he stressed that opponents of e-fairness in the states where new legislation has been introduced are galvanized, very vocal, and out in force. "Online affiliates argue that the state should not do anything that will hurt small businesses or favor one business group over another. We completely agree with this sentiment. And that is exactly the reason we support e-fairness legislation -- because we believe state taxation laws should be enforced fairly among all retailers, not just some."

Teicher explained that, currently, state tax authorities are allowing remote retailers with online affiliates in the state to skirt sales tax laws, thereby unfairly favoring a very small percentage of businesses (the online affiliates and remote retailers), while essentially penalizing the many thousands of retailers in the state who are obeying existing sales tax laws.

"We are not asking for a new tax. E-fairness legislation is not a so-called 'advertising' tax," said Teicher. "This is a tax compliance issue. It's about sales tax equity for Main Street retailers that are the key factors for jobs creation, especially in these challenging economic times."

Here's a brief look at ABA's most recent e-fairness efforts:

California

This week, ABA's Teicher; Hut Landon, executive director of the Northern California Independent Booksellers Association [1]; and Jennifer Bigelow, executive director of the Southern California Independent Booksellers Association [2], e-mailed California indies and noted some good news.

"As part of the emergency budget session in Sacramento, a provision has been added to the proposed legislative budget that would clarify state law to ensure that non-California merchants with online affiliates in the state acting as sales agents on their behalf collect sales tax on purchases shipped to California," they wrote. "This provision, which mirrors the one that was removed from the budget last year under threat of veto by Gov. Schwarzenegger, has already been approved by the State Senate Budget Committee and will soon be voted on by the State Senate."

Under the terms of the emergency budget session called by the California governor, proposals for mid-year budget action must pass the legislature and be sent to the governor by February 22. The associations believe prospects for Senate approval of the legislative budget are "good," and it's expected that the State Assembly will address the budget possibly as early as this week.

"Importantly," the e-mail continued, "this year we are working very hard with a broader coalition of supporters, including new allies in Silicon Valley, to make our case and to ensure that the Governor will not veto a budget that clarifies the responsibility of all retailers to collect state sales tax."

California members should soon expect e-mails from ABA and NCIBA asking them to write a letter to Governor Schwarzenegger in support of e-fairness.

Illinois

On Thursday, in an e-mail, ABA's Teicher; Jim Dana, executive director of the Great Lakes Independent Booksellers Association [3] (GLBA); and Susan Walker, executive director of the Midwest Booksellers Association [4] (MBA), called on booksellers in Illinois to support e-fairness legislation, SB 3353, currently under consideration in the Illinois State Senate.

If SB 3353, which is sponsored by Sen. Jeff Schoenberg, is signed into law, out-of-state online retailers who earn more than $10,000 through online affiliates in Illinois would be considered to have a physical presence in the state. As such, these large online retailers would be required to collect Illinois sales tax, thereby leveling the playing field for Illinois's bricks-and-mortar businesses. Sen. Schoenberg introduced the legislation directly due to the request of Roberta Rubin of The Book Stall at Chestnut Court in Winnetka, Illinois.

ABA, GLIBA, and MBA are asking Illinois booksellers to contact their state senator and ask him or her to co-sponsor and support SB 3353. "Please stress that this is not a new tax, but a tax compliance issue," they wrote. "Also, we need you to spread the word. Forward this e-mail to your fellow retailers and urge them to support this important bill."

To help booksellers in this important advocacy outreach, ABA, GLIBA, and MBA have prepared a template letter [5] that they can adapt and send to their local state senator [6]. Booksellers who are represented by Sen. Schoenberg are encouraged to thank him for introducing this important bill.

Booksellers who have any questions regarding how SB 3353 will impact their business are asked to contact ABA's Senior Public Policy Analyst David Grogan at dave@bookweb.org [7] or (800) 637-0037, ext 6662. ABA, GLIBA, and MBA also ask that booksellers notify Grogan when they have sent their letter. This will help the groups compile information to support this lobbying effort.

Maryland

This week, in an e-mail, ABA's Teicher and Eileen Dengler, executive director of the New Atlantic Independent Booksellers Association [8] (NAIBA), called on Maryland booksellers to support e-fairness legislation currently under consideration in the Maryland State Senate.

If SB 824, which is sponsored by Senators Madaleno, Conway, Currie, and Kelley, is signed into law, out-of-state online retailers who earn more than $10,000 per year through online affiliates in Maryland would be considered to have a physical presence in the state. As such, these large online retailers would be required to collect Maryland sales tax, thereby leveling the playing field for Maryland's bricks-and-mortar businesses.

"We need you to contact your state senator and ask him or her to support SB 824," Teicher and Dengler wrote. "Please stress that this is not a new tax, but a tax compliance issue. Also, we need you to spread the word. Forward this e-mail to your fellow retailers and urge them to support this important bill."

To help booksellers in this important advocacy outreach, ABA and NAIBA have prepared a template letter [9] that booksellers can adapt and send to their local state senator [10].

Booksellers who have Senators Madaleno, Conway, Currie, or Kelley as their state senator should thank him or her for introducing this important bill.

Booksellers with questions regarding how SB 824 will help their business are urged to contact ABA's Senior Public Policy Analyst David Grogan at dave@bookweb.org [7] or (800) 637-0037, ext 6662. ABA and NAIBA also ask that you notify Grogan when you have sent your letter. This will help ABA and NAIBA compile information to support this lobbying effort.

Virginia

On Tuesday, February 16, the State Senate passed e-fairness legislation, SB 660, by a vote of 28 - 12. The bill now moves to the House of Delegates for consideration and a vote.

"While this is great news, the reality is that significant challenges await the bill in the House," said ABA's Teicher and Wanda Jewell, executive director of the Southern Independent Booksellers Alliance [11] (SIBA), in an e-mail sent to Virginia bookstore members on February 16. "We really need to keep the pressure on. We need you to contact your delegate and other key delegates now if we are to get this critical legislation passed."

If SB 660, which is sponsored by Sen. Emmett W. Hanger, Jr. (R-District 24), is signed into law, out-of-state online retailers with nexus in the state via online affiliates would be required to collect Virginia sales tax, thereby leveling the playing field for Virginia's bricks-and-mortar businesses.

ABA and SIBA are asking booksellers to contact key delegates as well as their own delegates in the state. They are asked to stress that this is not a new tax, but a tax compliance issue. "Also, we need you to spread the word. Forward this e-mail to your fellow retailers and urge them to support this important bill," the e-mail noted. "There is no time to waste."

Virginia booksellers are asked to contact members of the House Finance Committee, especially House Finance Chair Bob Purkey [12] (R-Del.), as well as House Speaker William J. Howell [13]; House Majority Leader Morgan Griffith [14]; House Majority Whip Kirk Cox [15]; and Majority Caucus Chair Sam Nixon [16].

To help booksellers in this important advocacy outreach, ABA and SIBA have prepared a template letter [17] that booksellers can adapt and e-mail to their delegates.

Booksellers with questions regarding how SB 660 will help their business are urged to contact ABA's Senior Public Policy Analyst David Grogan at dave@bookweb.org [7] or (800) 637-0037, ext 6662. ABA and SIBA also ask that you notify Grogan when you have sent your letter. This will help ABA and SIBA compile information to support this lobbying effort. --David Grogan [7]