A Q&A With Michelle Ahlmer of the Arizona Retailers Association

In political jargon, characterizing something as “a heavy lift” conveys the difficulty of a task, and to many observers the prospect of making significant legislative progress in the fight for sales tax fairness in Arizona was a heavy lift indeed. Given its political climate, Arizona seemed an unlikely place for fulsome debate about affiliate nexus legislation similar to the laws passed by Arkansas, Illinois, New York, North Carolina, and Rhode Island. However, because of the savvy leadership of Michelle Ahlmer, executive director of the Arizona Retailers Association [1] (ARA), and the hard work of Main Street retailers, HB2551, sales tax fairness legislation introduced by Rep. Jim Weiers, went much farther than many thought it would – and things are set up well for next year.

HB2551 received a great deal of support from legislators on both sides of the political aisle at a time when partisan rancor is the norm. However, despite having strong support in the state House from both parties, the bill was left off the House Rules Agenda and rendered effectively dead. Afterwards, the bill’s language was added as an amendment to HB2341, which was under consideration in the Senate. The language was cut when it was learned that Gov. Jan Brewer was not supportive of the bill.

Ahlmer’s efforts certainly earned the praise of Gayle Shanks of Changing Hands Bookstore [2] in Tempe, Arizona. Shanks tirelessly advocated in support of HB2551 alongside Ahlmer. “Michelle was a pleasure to work with and is a brilliant lobbyist,” Shanks told BTW via e-mail. “She doesn’t get discouraged easily and has a lovely rapport with the legislators, who all seem to like her in spite of sometimes not agreeing with her position. She is intelligent and really understands the e-fairness issue, including how important it is to retailers in Arizona and elsewhere in the country.”

Shanks added: “She has me convinced that though we lost in this legislative session the fight is not over, and we will start anew in the next session better prepared and ready to win.”

As booksellers and supporters of e-fairness gear up for the next legislative session, BTW thought it was an opportune time to talk with Ahlmer about the recent sales tax fairness advocacy effort in Arizona.

BTW: The sales tax fairness issue made great strides in Arizona this year. What surprised you most with this campaign? What was most rewarding? And what were the keys to the successes you had?

Michelle Ahlmer: I was most surprised by some of the legislators who supported the issue, and some who did not support passage of the issue. As you know, the staunch conservatives still are the biggest hurdle. But I had anticipated that some legislators that were on the fringe of the Tea Party movement would be opposed, and, yet, some were not. I think that proves that the retail industry shouldn’t assume anything about this issue.

The most rewarding aspect of this campaign was the widespread grassroots support. It was fantastic to work with the business owners and other business organizations on this issue. The synergy and support was so valuable and extremely rewarding. I wish that every person who wrote to a legislator could experience what I did when legislators would tell me, “I’ve heard from people in my district” or “my constituents have been in contact with me.” The grassroots work is absolutely essential.

While the bill was not enacted, we did have success in educating legislators, highlighting the issue, and putting some pressure on the governor’s office and the Department of Revenue. The key to the success was relationships; relationships that the Arizona Retailers Association has with legislators, relationships that other business organizations have with legislators, and, of course, the most important relationship – constituents with their legislators.

BTW: What was the most challenging aspect of your sales tax fairness efforts in Arizona?

M.A.: The most challenging aspect of our efforts involved the legislator who held the position of chairman of the Rules Committee. The Rules Chair in the Arizona legislature has the power to hold up any bill in the process because every bill must go through the Rules Committee. We got caught in a struggle between personalities amongst legislators, which was very frustrating and caused us to perform several procedural maneuvers in order to move the bill forward – and around the Rules Chair.

Another challenging aspect of our effort was simply time. We would have benefited from the opportunity of being able to educate legislators before the legislative session began. However, this was an election year; so, we didn’t know exactly with whom we would be working. Furthermore, the session ended more quickly this year than any in the past decade, primarily due to the announcement from U.S. Senator Kyl that he is not seeking re-election, which made some elected officials very anxious to be out of session so that they could plan congressional campaigns.

BTW: Amazon.com has warehouses in Arizona that give them a much larger footprint than most retailers in the state, and yet some in the legislature don’t feel this creates nexus. Why is that?

M.A.: The Arizona legislation was based on the affiliate relationship and did not address Amazon’s physical presence in Arizona. A decision was made to pursue the affiliate relationship to establish nexus based upon the opposition we faced from a number of business organizations – and the fact that there is a body of case law that considers subsidiaries separate from the principle owner, and, therefore, not subject to nexus. The Amazon facility in Arizona is owned by a subsidiary.

BTW: A few years back, conservative legislators tended to oppose sales tax fairness, but now it seems it has become an issue that truly does have bi-partisan support … Why do you think that is? What changed?

M.A.: I believe that conservatives are supportive of this legislation based on the argument of fairness – it was really the winning argument. It is very difficult for a legislator to choose a large, out-of-state business over a locally owned and operated business that is at a disadvantage due to a state policy. Most of the legislators who were not committed to support our issue were very uncomfortable.

BTW: What advice would you give the many booksellers involved in e-fairness campaigns in other states?

M.A.: My advice to booksellers in e-fairness campaigns in other states is this: Never underestimate your voice! Never give up, and don’t hesitate to work with your competitors to win this issue – you’re all on the same side and together you’ll make the difference and win the issue.

BTW: Clearly, for retailers advocating on behalf of sales tax fairness, a defeated bill can result in “advocacy fatigue,” a feeling that all their hard work was in vain. But can a sales tax fairness campaign be deemed a success even if the effort failed to get the bill passed in the current legislative session? How so?

M.A.: I believe that the Arizona sales tax fairness campaign can be deemed a success because we have educated legislators who didn’t understand the issue or the depth of the problem. We also educated the public through our grassroots efforts. We have received commitments from the staff of the governor’s office that we will meet during the interim and resolve any questions. We have also learned that the Department of Revenue is working on something that will impact Amazon. All the efforts of the coalition here in Arizona have created a more positive environment, and we will continue to fight for fairness.

BTW: What does the coalition need to do to increase our chance for sales tax fairness success in the next legislative session?

M.A.: The Arizona coalition needs to just keep the effort alive – and avoid fatigue. We are planning to bring everyone together in a few weeks to develop a strategy for the interim and the next session. We need to expand our base of support; we need to meet with political groups that have opposed our efforts; and we need to continue to meet with the governor’s staff and with legislators.

We also need to celebrate the small successes along the way! I’m very grateful to the American Booksellers Association and particularly the Arizona booksellers for their support. There aren’t enough words to thank Gayle Shanks and her staff from Changing Hands Bookstore! Gayle worked tirelessly with me to convince legislators to support our issue and wrote endless letters and e-mails. Gayle is a superstar!