The sales tax fairness issue remained a hot topic in the media this week, as a number of states continue to look to level the playing field for in-state retailers. In California, it’s still an open question whether Gov. Jerry Brown will sign sales tax fairness into law as separate legislation, while an affiliate nexus bill fell short in Louisiana. Meanwhile, Amazon.com is attempting to negotiate a five-year sales tax exemption in Texas.

California

Although Gov. Brown vetoed the California budget last week, there still remains a chance that he may sign sales tax fairness legislation, AB 28X, as a stand-alone bill.

Early this week, ABA CEO Oren Teicher wrote Gov. Brown on behalf of ABA members in California and urged him to sign the measure. “Our member retailers cannot wait another year for sales tax fairness,” Teicher said. “Each year, as online sales continue to grow, the situation only worsens. Not only is the current sales tax inequity unfair to virtually every bricks-and mortar retailer in the state (all of whom collect and remit sales tax), it has cost the state untold millions over the years. The current $200 million yearly estimate will only grow if Amazon.com and others are allowed to continue their tax-free ride.

In addition, on Monday, ABA, the Northern California Independent Booksellers Association (NCIBA), and the Southern California Independent Booksellers Association (SCIBA) called on bookstore members in the state to contact Gov. Brown via phone or e-mail to urge him to sign AB 28X.

To make it easier for California-based bookstore members to advocate in support of AB 28X, ABA, NCIBA, and SCIBA have prepared a template letter [1] that booksellers can adapt and send as an e-mail or as a source for talking points for their phone call to Gov. Brown. (Access an e-mail form for Gov. Brown here.) [2]. Gov. Brown’s office number is (916) 445-2841 and the fax number is (916) 558-3160.

Louisiana

This week, HB 641, sales tax fairness legislation, failed in the Louisiana Senate, with 22 senators voting against the bill, and 15 voting for the bill. The state legislative session ends today.

“While sales tax fairness legislation didn’t pass this year, we nonetheless made great strides in the Louisiana,” said ABA CEO Oren Teicher. “Successful advocacy is the result of persistence and perseverance — qualities exemplified by the stalwart efforts of Tom Lowenburg [of Octavia Books [3] in New Orleans], who took time out of his busy schedule to testify at two hearings on this issue. Tom’s efforts, and the outreach of all the Louisiana booksellers who contacted their lawmakers, will, in the end, make a difference. It makes a huge impact when legislators can hear from an independent bookstore owner, as our members have been feeling the effects of sales tax inequity for a decade now. While we ran out of time this year, we have planted the seeds for a successful campaign next year.”

On Tuesday morning, Lowenburg testified before Louisiana Senate’s Revenue & Fiscal Affairs Committee. The committee passed the bill. However, the bill would have needed the approval of two-thirds of the state Senate to pass the Senate.

Texas

Last month, South Carolina and Tennessee lawmakers irked their Main Street retail constituents when they bowed to Amazon.com’s threats to build its warehouse facilities elsewhere by providing the online retailer with a sales tax exemption – thereby legalizing the remote retailer’s unfair advantage over Main Street. Now, Amazon.com is trying the same tactic in Texas as it continues its attempt to avoid collecting and remitting sales tax to the state.

Back in September 2010, Susan Combs, the Texas comptroller, assessed Amazon.com for $269 million in back taxes, which Amazon.com is currently contesting. Then, in late May, Gov. Rick Perry vetoed HB 2403, legislation that would have required Amazon.com to collect and remit sales tax for purchases made by Texas residents.

This week, Amazon.com upped the ante, and is now dangling the prospect of 5,000 jobs in front of lawmakers in the hopes the state will provide it with a five-year sales tax exemption.

However, in an op-ed published in the Austin American-Statesman [4] on Thursday, June 23, Ronnie Volkening, president of the Texas Retailers Association, urged legislators to reject the special tax exemption.

“Though the promise of jobs and revenue might sound tempting, one has to wonder why the deal wasn’t offered during the regular session,” Volkening wrote. “For the last six years, Amazon has operated a 600,000-square-foot distribution center in Irving. In deciding to operate in Texas, it has received significant property tax abatements. In that time, Amazon created 119 jobs. Now, it’s come forward with an offer to create 5,000 jobs, but only if legislators exempt it from the sales tax collection laws that all other retailers, be they brick-and-mortar or online sellers, must follow. It’s a brazen proposal to be sure, particularly in light of the fact that the language would guarantee Amazon nearly three years of benefits before it’s held accountable to deliver on its promise.”

Volkening continued: “Texas retailers, large and small, contribute to the state’s economy by collecting sales tax, paying property tax, employing Texas workers and contributing to community causes. Some of companies are struggling just to keep their doors open in the worst economy in 70 years.

“Yet here comes an out-of-state company, which already has an unfair competitive advantage over Texas companies, seeking a carve-out that only applies to them. It’s wrong, and legislators should simply say no.”