CALIFORNIA CARTRIDGE TAKES ON AMAZON.COM OVER SALES TAX

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CALIFORNIA CARTRIDGE TAKES ON AMAZON.COM OVER SALES TAX

Tulare County businesses take on Internet retailers
Visalia and Tulare businesses call Amazon.com tactics in fighting new sales tax unfair
A group of small, local retailers are teaming up with the big-box stores they compete with to take on an even bigger competitor who they say isn’t playing fair: Internet retailers who don’t charge California sales tax.California Cartridge, among other local businesses, came out against Amazon.com and its refusal to charge California’s sales tax to consumers.And, after the July 1 Online Tax Bill signed into law by Gov. Jerry Brown, several local retailers are calling for Amazon.com and others to start charging sales tax for millions of California online consumers."We strongly disagree with Amazon’s refusal to charge sales tax," said Steve Farnsworth, who has owned Total Office Products in Visalia for 19 years. "Sales tax drives our economy and we’re struggling without the revenue."Stand with Main Street, the group supporting small businesses and big-box stores, says California is losing out on as much as $4.1 billion in sales to online-only retailers, such as Amazon.com and Overstock.com.

Farnsworth teamed up with other local businesses and Visalia City Councilwoman Amy Shuklian on Tuesday to come out against Amazon.com’s refusal to comply with the law, which requires out-of-state retailers with a presence in the state to collect sales tax on California sales. In response to the law, Amazon.com cut ties with 10,000 California affiliates who help fulfill orders. As a result, Amazon, which is based in Seattle and is the largest online retailer in the country, has evaded having to collect sales tax.

The online retailer says it’s doing nothing wrong and has strongly opposed the bill. Furthermore, it says it’s complying with the federal Internet Tax Freedom Act, which doesn’t require out-of-state retailers to charge sales tax where they don’t have a physical presence. Congress extended that law through Nov. 1, 2014.

"We support a uniform federal solution. We offer customers the best prices regardless of whether sales tax is charged," said Mary Osako, a spokeswoman for Amazon. "Offering low prices has driven our success in states and countries where we already collect sales tax or its equivalent — that’s half our business."Success is in the numbers, say Amazon supporters. The online retailer has more than 137 million customer accounts and more than 2 million online sellers. The company employs thousands of people in more than a dozen states.Local business owners, though, say Amazon’s success has come at the cost of local businesses. In Visalia, where sales tax is 8 percent, and Tulare, where it’s 8.25 percent, small business owners say they can’t drop their prices by 8 percent or more. They’re urging people to shop locally and pay the sales tax to help boost the economy.

"We can’t compete. I believe in free enterprise and all I am trying to do is create a level playing field," said Bryan Perry, who owns California Cartridges and serves Visalia and Tulare businesses with ink and toner supplies. "Local businesses back up their sales with customer service. Amazon and other online retailers don’t."In Tulare, Bob Edgeworth, who owns Sequoia Hobby Shop, says it’s his customer service and warranty that have helped his business stay open. Steve Allgier, who works at Mark’s Truck and Tractor, says without the connection between the customer and the client, the consumer suffers.

Tulare resident Valerie Brunsdale points the finger at Walmart, Target and Costco Wholesale, which have discounted prices and have caused many small businesses to close, she said. She shops at Costco and has never made an Amazon.com purchase, she added."I have no reason to shop for low prices on Amazon. I have Costco and Target to help me save money and get what I want, with sales tax," she said. "It’s a competitive market and people have to keep up."

Ned Wigglesworth, a spokesman for More Jobs Not Taxes, agrees with Brunsdale and is working with others on a referendum for the June 2012 ballot. The referendum would allow voters to approve or disapprove the bill signed by Brown. Signature gatherers are working to collect 504,760 signatures to get the referendum on the ballot. Wigglesworth is optimistic, saying the law hurts California more than it helps.

"This law hurts small California businesses and benefits businesses in other states," Wigglesworth said. "The law is harmful to tens of thousands of small California Internet retailers. It’s big-box stores that have done more to destroy Main Street than online retailers ever will."The coalition to fight Amazon and other online retailers consists of support from more than 1,000 businesses, including Walmart, Target, The Home Depot and chambers of commerce across the state.

Local small businesses and city officials say they’ll continue to fight until competition is fair."I am Armenian. We like the best deal possible. But seeing things from the other side and the difference sales-tax revenue can make to a community, it’s different," Shuklian said. "It’s sad. We have to find a way to keep these taxes local."

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August 11, 2011 at 12:03 PM