Barnes & Noble Thanks California Governor Jerry Brown for Signing AB 28x-E-FAIRNESS

Barnes & Noble Thanks California Governor Jerry Brown for Signing AB 28x-E-FAIRNESS

Barnes & Noble has issued this

press release

praising California’s Governor Jerry Brown for signing a law that redefines a “nexus” in California, compelling more out-of-state organizations to collect sales tax.

In response, Amazon dropped its Associate program in the state, cutting off advertising fees to ten thousand Californians (including me).

Depending on how things go, Amazon may also need to remove subsidiaries from California to avoid being compelled to collect California’s sales tax.

Barnes & Noble says in part:

“We believe that e-fairness will improve the economy, add jobs, and help struggling businesses everywhere in California.”

It would be interesting to hear them articulate the mechanism by which these elements will be achieved.

This law does not “level the playing field”, as you will hear, between internet retailers and brick-and-mortar stores. It could be argued that the fact that internet retailers do not collect sales taxes at the time of sale for purchases outside of states where they have a nexus (buildings, a sales force) gives them an advantage over stores which do.

However, this law has not resulted in Amazon collecting sales tax. Instead, Amazon will continue to take money from California (by way of sales), but stop sending money into California (by way of advertising fees to Associates…and more, if they withdraw their subsidiaries).

Let’s say that the average Associate made only one thousand dollars a year in advertising fees. That’s ten million dollars in what was probably largely discretionary funds that California loses. That money was also taxed by the state.

Barnes & Noble: how does the loss of the Associate advertising fees coupled with no sales tax being collected by Amazon (maintaining the status quo) lead to helping the economy?

For more information on my opinion on this law, see this earlier post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

7 Responses to “Barnes & Noble Thanks California Governor Jerry Brown for Signing AB 28x-E-FAIRNESS”

  1. Harold Says:

    Barnes & Noble is just a part of the Corporocracy agenda. They’ll just keep lining the pockets of their party of choice to do their agenda.

  2. Common Sense Says:

    “Barnes & Noble: how does the loss of the Associate advertising fees coupled with no sales tax being collected by Amazon (maintaining the status quo) lead to helping the economy?”

    They are mistakenly assuming that people will purchase things locally instead of online. Why, I don’t know, this only hurts the associates.

    Amazon still has the greatest selection of merchandise, usually the lowest price, and you can usually get free shipping.

    Anytime government, at any level, sticks its nose into the free market, the market is no longer free and runs less efficiently, weakening the economy.

    The losers are the associates and the state of CA.

    • bufocalvin Says:

      Thanks for writing, Common!

      Instead of “assuming” I might say “suggesting”. I don’t see how, since the sales tax situation didn’t change for the consumer, it’s going to encourage local purchases. The only thing I can think of is that advertising for Amazon is reduced, since California residents can’t be compensated for successfully advertising for Amazon. If the purchasing depends on customer discovery, though, is that more likely online or in a store?

  3. Andrys Says:

    Web-publishers who carry, essentially, advertising to advertiser pages are exactly that, not “physical sales force” in the state.

    Re the unfairness of no-tax, what about shipping costs?

    And, B&N likes to say with them you get a ‘real’ ‘physical’ store with real people in it, who help you ‘in person’ and you can even use their toilets. One would think they saw that as an advantage and people do like places they can walk in for help (though I think reality of Nook help is not very strong in the stores, for Sales, sure.).

    The earlier Supreme Court decision (the one in detail) speaks of strong physical sales presence in some portions. Subsidiaries with separate management (which Amazon was careful to do) were not included in strong physical presence.

    But no one ever mentions the expense of shipping costs for mail-order companies.

    Also, the brick & morter stores who were lobbying for the change tend to have headquarters in other states and do not pay taxes for products bought in other states if they don’t have businesses physically there. It’s ironic.

    It’ll be interesting to see how the latest attempts fare in the Supreme Court, some say soon.

    • bufocalvin Says:

      Thanks for writing, Andrys!

      Good points, all. 🙂

      Having the restrooms is an expense, but one which they choose to have (and probably benefits them…since customers can be in the store longer. I don’t think the kind of cafe activity they do legally obligates them). That’s why Borders that were going out of business didn’t have restrooms available…they’d stopped ordering supplies.

  4. David Says:

    Looks like B&N and the Peoples Republic of California are using ‘Atlas Shrugged’ as a playbook.

  5. Mickey Blue Eyes Says:

    As having been a Calif resident the first time Governor Moonbeam ran the state into the ground, logic or critical thinking is not Governor Moonbeam’s strong suit.

    Big box stores will always have an advantage over Amazon because you can walk in and immediately walk out with what you need rather than wait days for Amazon delivery.

    If they want true fairness, they’d tell you to come back in three to five business days to pick up your purchase, unless you want to pay extra for next business day.

    Where big box stores have the benefit of immediacy, Amazon has to ship everything. Even if you get “free” shipping, *somebody* is getting paid. There’s the fuel taxes on the vehicles. There’s the corporate income tax. There’s the income tax from the employees. And the income tax from the Amazon Associates.

    Trying to hurt Amazon only hurts the state and residents.

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