Column: Sales tax bill ill-advised
It was a happy day for me when, years ago, the Little Professor Book Center opened in Lakewood Mall. It was an equally sad day when it recently closed its doors.
In today’s environment, a small bookstore has one big problem and one insurmountable problem. Matching its small inventory to the tastes of local readers must have been a constant challenge. With some readers looking for romance novels or cookbooks, others for religious literature and still others for books about vampires, it is hard to offer anyone more than a small shelf. That’s the big problem.
The insurmountable problem is competition with mail-order bookstores. It was always possible to order a book if you knew what you wanted. What a bookstore offered you was the opportunity to browse. I once walked out of a Barnes and Noble just outside of Washington, D.C., with a half dozen books that I didn’t know existed before I walked in.
The Internet tipped the balance against the brick-and-mortar bookshop. A wider variety of books is now available online than can be found anywhere outside the Library of Congress. I can move in an instant from a book review to reading the first chapter free on Amazon. Another moment later it is on my Kindle. It is also available at a discount — and there is the rub.
Congress is moving legislation that would allow state governments to compel out-of-state vendors to pay sales tax. If I could buy “A Confederacy of Dunces” locally, Pierre would get a cut of the action. If I download it to my Kindle, Amazon and I can skip the tax. Even a dunce can see why local retailers and state treasurers are unhappy with this arrangement.
It’s a bad idea. The Constitution grants Congress the exclusive power to regulate commerce between the states. The precise purpose was to encourage the flow of goods and services across state borders. If the bill passes, any business shipping goods about the country (and making more than a million in sales) will have to file tax documents for more than 40 states. That’s no big deal for Amazon, but it might be a formidable obstacle to a growing firm that can’t yet afford a small army of accountants. Amazon likes the bill because it would discourage startups from challenging its dominant position.
If Congress really wants to level the playing field, it should create a single form by which vendors could pay an interstate sales tax. The rates could be set at the average of state sales taxes and the revenue collected would be paid to the various state governments. Congress would foot the bill for administration. That would be fair to all the parties. It would place no undue burdens on next year’s big Internet success. It would disappoint no one who does not have a degree in accounting. It would not, alas, save the local bookstore.
Kenneth C. Blanchard Jr. is a professor of political science at Northern State University. Write to him at email@example.com. The views presented are his and do not represent NSU.