California Governor Vet s Sales Tax Bill

John Mutter |

Oct 02, 2000

News
California Governor Vet s Sales Tax Bill John Mutter -- 10/2/00 California Governor Gray Davis has vet d a bill requiring online retailers to collect sales taxes if they have bricks-and-mortar stores or warehouses in the state. Strongly supported by the Northern California Independent Booksellers Association and the American Booksellers Association, the bill would have required B&N.com and Borders.com, among others, to charge sales tax--and thereby erase a price advantage independents say is unfair. Davis, a Democrat, took the action because he did not want to "stifle" e-commerce, Reuters said. In an echo of federal inaction on the issue, the governor did, however, sign measures to create a commission to examine Internet sales tax issues and set a three-year moratorium on Internet access taxes. In a statement, NCIBA executive director Hut Landon said he was "stunned and amazed by the governor's stated rationale for his veto." Rather than imposing a sales tax, Landon emphasized, the bill was "a focused effort to close a loophole in the tax code and only affected a handful of companies." He also expressed frustration that the association had failed to get an appointment with the governor's office. NCIBA and supporting legislators plan to reintroduce the bill next year. In a letter to the governor, Oren Teicher, chief operating officer of the ABA, pointed out that some national retailers, such as Macy's and Wal-Mart, are collecting tax on their sales in California. "Unfortunately, other retailers--including Borders and Barnes & Noble--are hiding behind a commercial facade of 'separate' online companies to avoid collecting the sales tax due. In fact, in clear and fundamental ways, these companies have carefully integrated their online operations with those of their bricks-and-mortar stores."

News

California Governor Vet s Sales Tax Bill
John Mutter -- 10/2/00

California Governor Gray Davis has vet d a bill requiring online retailers to collect sales taxes if they have bricks-and-mortar stores or warehouses in the state. Strongly supported by the Northern California Independent Booksellers Association and the American Booksellers Association, the bill would have required B&N.com and Borders.com, among others, to charge sales tax--and thereby erase a price advantage independents say is unfair.

Davis, a Democrat, took the action because he did not want to "stifle" e-commerce, Reuters said.

In an echo of federal inaction on the issue, the governor did, however, sign measures to create a commission to examine Internet sales tax issues and set a three-year moratorium on Internet access taxes.

In a statement, NCIBA executive director Hut Landon said he was "stunned and amazed by the governor's stated rationale for his veto." Rather than imposing a sales tax, Landon emphasized, the bill was "a focused effort to close a loophole in the tax code and only affected a handful of companies."

He also expressed frustration that the association had failed to get an appointment with the governor's office. NCIBA and supporting legislators plan to reintroduce the bill next year.

In a letter to the governor, Oren Teicher, chief operating officer of the ABA, pointed out that some national retailers, such as Macy's and Wal-Mart, are collecting tax on their sales in California. "Unfortunately, other retailers--including Borders and Barnes & Noble--are hiding behind a commercial facade of 'separate' online companies to avoid collecting the sales tax due. In fact, in clear and fundamental ways, these companies have carefully integrated their online operations with those of their bricks-and-mortar stores."

A version of this article appeared in the 10/02/2000 issue of Publishers Weekly under the headline: