Thursday, April 26, 2018

Supreme Court Sales Tax Case Should Help Book Industry

As the Supreme Court weighs arguments in a case before it about whether Internet sales can be taxed just like a purchase at the mall, book publishing insiders anxiously await their decision.  Will a vote to tax online sales impact the book industry, and if so, how?

On the positive side, if Net sales are treated like those at a physical store, a boost will be given to the tax proceeds collected by the government.  The e-commerce world is huge and growing bigger by the day, and without a change to the law, billions of dollars each year will go uncollected for roads, safety, education, elder care, healthcare, and all of the valuable services a government can and should provide.

In 2002, with the Internet into its second decade of existence, 45 billion dollars of goods were purchased online.  The amount doubles every five years.  It actually tripled in 2007 to 136 billion, then doubled in 2012 to 230 billion and doubled again in 2017 to nearly 453 billion.  In 2018, it exceeds half a trillion dollars.

Some of the Net transactions get taxed today.  The law says if you have an office or a physical presence in the state, you must tax goods sold to people living there.  Only recently did Amazon volunteer to collect taxes in most states.  Many of the big retailers – with a physical and digital presence – have their goods taxed.  But many Internet-only and smaller businesses do not charge sales tax.

To not charge sales tax allows a business or individual to gain an advantage over others.  The digital world already cuts overhead costs for them but the tax differential could be used as an added incentive for a shopper to go online.  This hurts brick-and-mortar stores and these are the businesses that really serve the community – they buy real estate, pay real estate and sales taxes, hire locals, and create a physical presence that’s sorely needed for the human race.

However, to tax online sales creates an undue burden of paper work and cost to the online business.  Perhaps the process can be simplified and made less costly.  Those who will get hit hardest are those who re-sell used stuff on ebay and CraigsList, those who act as third-party affiliates, and those who seek to earn some extra money on the side by selling their art, books, crafts, etc.

The book industry should want all sales taxed.  It does better when physical copies are purchased in bookstores.  If online sales or ebook sales are rewarded or seem more appealing, the entire infrastructure of the book industry collapses.

If one wants a separate argument about how our tax dollars are misappropriated or how Trump’s tax cuts for the uber rich hurt the poor, or whether all states should charge a sales or income tax are all debates for another time and place.  There is a sales tax in most of this country, so what can be done to level the playing field between the digital and physical world?

But I will say this, there should be a sales tax exemption on books. Most states don’t tax newspapers and magazines.  Books should be no different.  When the government can tax information and free speech, there becomes a control on the dissemination and flow of ideas, views, and facts.

Tax a mop and a car and bag, not a book, where the product is words arranged in a certain order.  The book industry deserves a tax break -- literally -- and there would be no better way than to drop the sales tax on books.  But if a tax on sales is to be charged, do so whether the sale is made by computer, phone, in-person, at a store, or on Mars.


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Brian Feinblum’s insightful views, provocative opinions, and interesting ideas expressed in this terrific blog are his alone and not that of his employer or anyone else. You can – and should -- follow him on Twitter @theprexpert and email him at He feels much more important when discussed in the third-person. This is copyrighted by BookMarketingBuzzBlog © 2018. Born and raised in Brooklyn, he now resides in Westchester. His writings are often featured in The Writer and IBPA’s Independent.  This was named one of the best book marketing blogs by Book Baby and recognized by Feedspot in 2018 as one of the top book marketing blogs. Also named by as a "best resource.”

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