Acton Bookshop Owner Leads Charge for State Sales Tax on Online Purchases [POLL]
Willow Books & Cafe owner advocates for online retailers to be required to charge Massachusetts state sales tax, just like local merchants.
If you recently bought the bestselling book, The Hunger Games, the price of the paperback book on Amazon.com is currently $5. The price of the book at your local bookstore (Willow Books & Café) is $8.99.
Yes, the online price is cheaper. But even more: you didn't have the pay the 6.25 percent state sales tax on top of that higher price.
David Didriksen, owner of Willow Books & Café in Acton claims it is an unfair advantage that online retailers like Amazon get to avoid collecting state sales tax.
“It is a competitive advantage for Amazon because they don’t charge any sales tax and they spend millions and millions of dollars a year fighting this all across the country because they know it’s a competitive advantage,” said Didriksen.
Didriksen and Salem Mayor Kim Driscoll co-chair the Massachusetts Main Street Fairness Coalition, a group that calls for online retailers to be be required to collect state sales tax. In 1992, the U.S. Supreme Court ruled that retailers without a physical presence in a state are not required by law to collect that state's sales tax.
“The Supreme Court decision was made way before the Internet really even happened,” said Didriksen. “They are using this loophole to not collect tax. But take Staples for example, the number two online retail site, they collect tax and Barnes & Noble collect tax – Amazon is one of the only ones who doesn’t do it.”
That may be because if a company has a physical presence in a state, as Staples and Barnes & Noble do, then they must collect sales tax.
Which brings us to Amazon, the Goliath of online retailers. Amazon is buying a mobile-robotic solutions company based in North Reading, Kiva Systems Inc., for $775 million.
Amazon is also said to be considering purchasing a space in the Cambridge Innovation Center.
The Main Street Coalition held a press conference at the Harvard Book Store in Cambridge this morning to illuminate what it says is the importance of having state and federal legislation to address this issue.
“You make choices in life about where you want to spend your resources,” said Didriksen. “If you want to have all retail stores go away, where you have to get everything online, then by all means, buy everything online. If you think that there is some value in having local businesses that employ local people and make contributions for the local community then you should really frequent your local business community.”
Tell us what you think by voting in this poll and leaving further comments in the comment section below.
Debra Simes
7:01 am on Tuesday, April 10, 2012
Bravo for the Massachusetts Main Street Fairness Coalition! Online companies are advantaged not only by their lack of typical "bricks and mortar" overhead in the communities where they do business, but also by their ability to ignore what real shops in real communities must do: collect tax on their sales. This makes the playing field that much more uneven, and additionally, robs us (communities and individuals that comprise our Commonwealth) of revenue that's sorely needed for myriad purposes — infrastructure repair, education, mass transit development, etc. And although, as Massachusetts residents, we're required to report (when we file income tax returns) the value of online transactions on which we did NOT pay state sales tax (and then pay state tax on that value), we all know that most people don't bother tracking and reporting. I support the effort to make online retailers collect state sales tax. It's doable: as noted, Staples and B&N already do it. Let's make it fair for all and help boost the ability of small retailers to populate our communities with precisely the kinds of businesses we claim we like and want.
Allen Nitschelm
7:36 am on Tuesday, April 10, 2012
What a terrible idea. Let's spread the "misery" of taxes to everyone. This organization should be trying to repeal the local sales tax, not trying to get others to pay it. The reason Massachusetts isn't competitive with the Internet is only partly related to taxes (most of it is probably convenience and lower prices). What about New Hampshire? Will this group then lobby that NH needs to charge a sales tax so that local MA businesses will be "competitive?" It is strange that local business owners would be calling for residents to pay more in sales taxes. I'm sure if MA were sales-tax-free and the Internet charged a national sales tax, these same advocates would be arguing the other position. No, this is about self-interest, not about helping the Commonwealth to raise revenues (although the politicians would love to get their hands on all this extra revenue "for the children," I am sure.)
We have a wonderful new technology that is allowing people to save money. Let's allow capitalism to work and not try to artificially fix every special interest that cries foul. If Mass. businesses think the sales tax is anticompetitive, then lobby their representatives to have it repealed (instead of raised, which is what happened recently.)
Make no mistake, if we start taxing Internet sales, MA consumers will end up paying the bill (not the Internet companies). This is a tax on our residents, no one else.
Keith Yockey
10:57 am on Tuesday, April 10, 2012
Wrong poll question. You buy online, you owe Use Tax.
When shopping online, should the consumer pay Use Tax? YES
Should States force online retail to collect Sales Tax? NO!!!!
Keith Yockey
11:00 am on Tuesday, April 10, 2012
'Unfair Advantage' What a MYTH. B&Ms scream that every time a WalMart/Target move in next door. And the biggest lobby $ to push this comes from where? Yep, WalMart/Target and Amazon.
Even if online did collect tax, they can still outprice a B&M bc of lower overhead. What would B&Ms want next? Fed. mandated price fixing?
Allen Nitschelm
11:06 am on Tuesday, April 10, 2012
"What would B&Ms want next? Fed. mandated price fixing?"
Hey, don't give them any ideas!
David Didriksen
12:16 pm on Tuesday, April 10, 2012
The law still requires that we all have to pay sales tax, even if Amazon does not collect it. No one is asking for a new tax, or for "price fixing". That's just stupid!
Maybe sales taxes should be abolished altogether, but that's not going to happen in this state. Get real! All we are asking for is a fair and even application of the law. Doesn't everyone deserve that much?
Keith Yockey
5:27 pm on Tuesday, April 10, 2012
A B&M has one store w one location and one tax rate. Online would need to deal w 11000 tax districts across the US, and none are defined by zip code, nor does any of the 45 States offer software to integrate into a website shopping cart. B&Ms think only of their back yard This problem is bigger than just their little community. See http://www.avataxrates.com/ It clearly shows that States have done nothing to satisfy Quill v ND.
Allen Nitschelm
5:27 pm on Tuesday, April 10, 2012
The article makes clear (and everyone knows) that people don't "voluntarily" pay the sales tax. We also know people don't voluntarily pay extra taxes even though tax advocates put that option on our Massachusetts tax forms. It just doesn't happen.
Yes, sales taxes should be abolished altogether. The fact that it isn't going to happen "in this state" is what your organization should be concerned with, in my opinion, not trying to spread the misery of higher taxes to those entities that have (so far) avoided them.
You can't disagree that these taxes will be paid by individuals, and that your effort, if successful, will result in many millions of tax dollars going to the state that otherwise would not do so.
I understand your business reasons for seeking to level the playing field. But the extra business you might earn (in the Patch example, bringing the cost of the Hunger Games book from $5 to $5.35 as opposed to Willow Books' $8.99 plus 6.25% tax or $9.60) is not going to do much to help your business. You won't see hundreds or even dozens of new customers that before-tax would save $4.60 and after-tax will save $4.25.
No, you will see the state reaping hundreds of millions of dollars in extra tax revenue, and hundreds of millions of dollars coming out of the checkbooks and pocketbooks of Massachusetts residents.
This is a bad idea which is made worse by the blind advocacy of business people who should know better.
Allen Nitschelm
9:52 am on Wednesday, April 11, 2012
There is a more important issue at stake here as well, and that is removing barriers to commerce, not erecting more of them.
We know that having "protectionist" laws and "tariffs" are not good economic policy--just look at the US government's advocacy for free trade agreements. They know that this stimulates economic growth.
It may be that bookselling is simply more efficient when done over the Internet. Consumers should reap those benefits. Taxing the efficient models to bring them in line with the inefficient ones will never work in the long run.
By advocating that Massachusetts' regressive sales tax should not only be defended, but should be applied to non-Massachusetts operations, we are perpetuating an inefficiency which theoretically benefits governments and creates a "level playing field" but in reality reduces efficiency and economic activity, otherwise we wouldn't be passing NAFTA-type free trade agreements but would instead be putting in place protective tarrifs and taxes to keep out goods that are more efficiently produced elsewhere.
Belle C
9:52 am on Wednesday, April 11, 2012
So once Amazon has a "physical presence" in Massachusetts won't they have to collect sales tax just like Staples, B&N and Dick Blick Art supplies? I know before Blick opened a store in Cambridge they didn't collect the tax on online sales. I also know of online retailers with shipping locations in states that collect the tax for that particular state as well.
I don't believe the tax is what sends people looking to online retailers. It is primarily the convenience of it in our hurried lives. For me in many cases it is the actual ability to get the exact item you want within a short turn around. Don't get me wrong there is nothing I like better than to browse the shelves of my local bookstore and come home with new reading material but that is only when I have the time.