E-Fairness Update: NYC Mayor Backs E-Fairness Provision

July 29, 2008

This month, New York City Mayor Michael Bloomberg came out in favor of New York State's Internet Sales Tax provision, which is currently being challenged in court by Amazon.com and Overstock.com.

Bloomberg said it was only fair that out-of-state online retailers pay the same tax rate as their in-state competitors, as reported by the New York Sun. The mayor told reporters: "If you are going to have a tax system, one of the essences of it should be that it is fair. And it just inherently makes no sense whatsoever to tax you if you want to buy a book from Amazon differently than if you want to buy a book from a bookstore. I'd feel the same way about the food vendor with the cart outside or the coffee vendors. They should be paying the same kind of sales taxes as somebody who rents a store and sells coffee from that store."

On April 25, Amazon charged that New York's Internet Sales Tax provision violates the Commerce Clause of the U.S. Constitution since it "imposes tax-collection obligations on out-of-state entities such as Amazon who have no substantial nexus with New York." At the time, a spokesperson for Amazon.com noted simply that the retailer would comply with the Internet Sales Tax provision to "obey the law." On June 1, the retailer began collecting sales tax on orders made by New York State residents.

In a suit filed in early June, Overstock.com is asking for an injunction and for the court to declare the Internet Sales Tax provision unconstitutional, according to The Albany Business Review. In contrast to Amazon, however, Overstock decided to drop its 3,400 New York-based affiliates rather than begin collecting sales tax on June 1. New York State has asked Overstock to consolidate its lawsuit with Amazon's. And, according to the Business Review, Overstock will most likely agree to consolidate its lawsuit with Amazon's legal challenge.

The case is scheduled to begin on September 15 before Judge Eileen Bransten in New York Supreme Court in New York City.

ABA continues to urge booksellers in the 44 other states with sales tax to write, fax, or e-mail their governors about this key issue. To make this communication easier, ABA has prepared a template letter that can be adapted and sent. The association asks businesses that contact their governors to send a copy of the letter to ABA Public Policy Liaison David Grogan at dave@bookweb.org.

Additionally, ABA is asking anyone with connections to a state legislator arrange a meeting with the legislator regarding e-fairness. The association will provide booksellers with the necessary briefing, materials, and information -- and in some cases, might be able to participate in the meeting with the booksellers.

Booksellers who have a legislator in mind, or who would like to discuss this issue further, are asked to contact Grogan at (800) 637-0037, ext. 6662, or via e-mail at dave@bookweb.org. ABA staff can help walk interested booksellers through the process of setting up a legislative meeting and answer any questions about the association's Campaign for E-Fairness.

Topics: News - Bookselling, Sales Tax Initiative,