“The A Word”: Part 2–California Sales Tax

Let’s be honest. Who enjoys paying sales tax? Yet, as much as we gripe about the additional cost tacked on to our purchases, our tax dollars help pay for necessary and beneficial services like public education, transportation, housing, health and human services, corrections and rehabilitation, and environmental protection.

Up until recently, Amazon.com has been exploiting a loophole in the law to avoid making its customers pay sales tax. Since the company does not maintain a physical presence in the state (even though they own subsidiaries in California), it has gotten away with this. Until now.

A summary of events:

Gov. Jerry Brown recently signed legislation that would have required Amazon.com to start collecting a 7.25% base sales tax on online purchases. Emphasis on would have. In retaliation, Amazon abandoned 10,000 of its California affiliates, who are agents paid to entice shoppers to buy through Amazon. This way, Amazon hoped to remain exempt from collecting tax, since it removed its physical presence from the state. Now, Amazon is petitioning for a referendum that would allow Californians to vote on whether to overturn the new law that forces Internet retailers to collect sales tax. The law was passed to help California increase its tax revenue by $200 million annually. Amazon argues that its referendum would allow the company to continue supporting jobs and investing in the state. Amazon must gather more than 500,000 signatures by late September to put its measure in the statewide vote in February.

In the wake of these events, Spellbinder certainly has its own opinion about the matter. But, we realized that we couldn’t voice our plan of action any better than Green Apple Books (a San Fransisco independent bookstore) did in their recent blog post. So, we got permission to re-post their petition plan here:

Here’s the press release Green Apple Books issued today. Media inquiries welcome.
 
FOR IMMEDIATE RELEASE
Contact: Pete Mulvihill – pete@greenapplebooks.com (415) 387-2272
 
Green Apple Books to petition state government to become exempt from sales tax
 
San Francisco, CA (August 16, 2011)—In a move spurred by Amazon.com’s campaign to collect 500,000-plus signatures in an effort to overturn California’s Sales Tax Fairness law via referendum, Green Apple Books owners Pete Mulvihill, Kevin Ryan, and Kevin Hunsanger have decided that they, too, will take a step toward not collecting sales tax. “We, too, are fed up with government providing infrastructure, security, and education” says Pete Mulvihill. “Enough is enough.”

Co-owner Kevin Ryan further argues that while Green Apple Books is a long-established presence in San Francisco that has always collected sales tax, there are more compelling reasons for the store to discontinue the practice. “Sure, the sales tax on books purchased at our store contributes to a better quality of life for all Californians, including social services for the elderly and disabled, but collecting sales tax kind of feels like overkill. We do enough for the community anyway,” says Ryan.

“I like Amazon’s angle here, and I think ALL indie stores should be exempt,” adds co-owner Kevin Hunsanger.

Additionally, Green Apple’s ownership provides this list of talking points:

  • More than two-thirds of Green Apple’s staff do not have children and therefore should not really contribute tax money to public education;
  • Most of the staff members do not own cars, so maintaining good roads isn’t that important. They could just walk;
  • Statistics suggest that booksellers are 36% less likely to use emergency services than antiques dealers;
  • Although many of the staff at Green Apple do in fact enjoy state and local parks, they sort of think someone other than the bookstore’s customers should pay to maintain them;

On Saturday, August 20, 2011, co-owner Kevin Ryan will hit the streets in an effort to collect enough signatures to put this issue into the hands of voters.

 Thanks Green Apple Books!  Visit their site: http://thegreenapplecore.blogspot.com/

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The “A Word”: Part 1-The Discount Dilemma

These days, most booksellers for small independent bookstores wince when they hear a customer utter the “A word”– Amazon.  Much to the chagrin of brick-and-mortar bookstores everywhere, the “A word” has invaded book-buying vernacular. Not only that, but the “K word” (Kindle) is also tossed around more than booksellers would like to hear. “I stopped by your bookstore because I forgot my Kindle at home,” a customer traveling through town will tell us. “Let’s go, honey. We can find it cheaper on Amazon,” a thrifty woman will whisper to her husband after eyeing the retail price of a book in our store. “If bookstores would just match Amazon’s prices, I’d be happy to stop buying books online,” confides another customer.

Named after the world’s largest river, Amazon.com is the largest online retailer in the world. Of course, this has sizeable implications for the smaller stores struggling to compete with this big, fast and bold company. Unfortunately, brick-and-mortar stores cannot provide the discounts comparable to those offered by Amazon. Since Amazon sells higher mark-up items like electronics to help defray costs–and enjoys the financial security provided by its stockholders–it has the flexibility to mark down retail prices of books and sell them at a loss. This means Amazon essentially has the power to sell the books at (or often even below) cost, which translates to big discounts that bookstores can’t match.

In contrast to Amazon, bookstores pay for knowledgable staff to help customers one-on-one, and other business necessities like bags, shelves, signage, electricity, heating/air conditioning, and display materials. To pay for these extra costs, bookstores must usually rely on sales from sideline items like toys, candles and souvenirs. In addition, many bookstores (including Spellbinder) donate thousands of dollars to the community every year in the form of donations and discounts for schools, organizations, and book clubs. Small business donate about twice as much to charitable organizations as large businesses, according to a 1991 study by Patricia Frishkoff for the Small Business Administration. Sure, Amazon must pay for offices, warehouses and shipping fees, but it’s not reasonable for brick-and-mortar stores–with more overhead costs– to be expected to compete with the discounts Amazon can afford to give away.

Here at Spellbinder, we try to offer as many discounts as possible to our customers. All hardcover and paperback bestsellers are always 20 percent off. We mark down our remaindered “last chance” books to 25 percent off. We also just started carrying used science fiction and westerns that range from $1.98 (for paperback) to $9.98 (for hardcovers!). The prices of the books in our “sale” section range from .98 cents (for paperbacks) to $6.98 (for hardcovers!). Schools teachers, and local organizations that promote literacy receive 20 percent off their purchases. Book clubs benefit from 15 percent off their books. We also reward honor students with 20 percent off their book-buying indulgences.  In any given year, the donations and discounts we give add up to $35,000.00 – $40,000.00!

Finally, we offer eBooks through our web site for prices comparable to those posted by Amazon. However, they are only downloadable through the iPad, the Nook and the Sony eReader. Once a customer buys a Kindle, he has resigned himself to only buying eBooks through Amazon.

As much as we can, we’re trying to give our customers the best prices we can afford to offer. We hope our customers appreciate this–in addition to everything we contribute to our community– as much as we appreciate their continued business with us. It’s only through the continued support of you–the readers of this community–that we will remain in existence here in Bishop!

-Devon

Hooked on eBooks?

“I have an electronic reader, but I never use it in public,” a friend of Spellbinder told us recently. “I don’t want to encourage people.”

This friend happens to work in the book publishing industry, and also happens to be one of the lucky few who still has a job in the book publishing industry. She said she would be surprised if she still had her job in two years. Why?

We’ve reached the age of digitization.

An increasing number of people own electronic reading devices and are opting to buy eBooks over hard copy versions. What will this mean for the publishing industry? What will this mean for bookstores? This is not meant to be an electronic reader-bashing blog post, but rather a helpful explanation of the pros and cons of this new development in the book industry. But most importantly, we want to emphasize that supporting electronic readers and supporting local bookstores doesn’t have to be mutually exclusive. Read on to find out why.

Sure, electronic readers have their perks. Our friend in the publishing industry was issued one by her company to offset the cost of printing and mailing manuscripts. In her company’s case, electronic readers save time and money.

Electronic readers may also save a traveler from lugging around a stack of to-be-read books on a long journey, although college students may benefit more from the weight-reduction theory than travelers. The heft of some textbooks is enough to anchor small boats. A more portable, lightweight version of textbooks (such as an electronic reading device) might be just the thing to reduce chiropractic bills.

 So yes, electronic readers can have their moment of glory. But the environmental arguments have to stop. There are more legitimate reasons to validate buying an electronic reader than: “They save trees.” That argument is rendered null and void after assessing the fact that reading devices aren’t biodegradable and many books are now being printed on recycled paper. And, the amount of electricity used to charge electronic readers makes their environmental footprint at least on par with that of books.

But, let’s get around to the most pressing issue here, which is how people can have their electronic readers and their local bookstores too! There are different providers and models of eBook readers– Kindle, Nook, iPad, and Sony eReader, to name a few. But there is only one device that we, as a bookstore, have real qualms about:  the Kindle. Sure, we appreciate when customers say things like, “I have a Kindle, but I still try to support my local bookstore too.” But, in reality, owners of Kindles can really only support their local bookstores to a certain point. Kindle stands apart from the rest by limiting owners to purchasing eBooks exclusively through Amazon.com. Roughly translated, that means that you can’t buy an eBook from Spellbinder for your Kindle.

The other electronic readers are more forgiving. They actually let customers buy eBooks through our bookstore! That way, money can continue to circulate through our community! Spellbinder has now partnered with Google to bring our customers the most flexible way to buy eBooks. If you have any questions, please feel free to come in and the staff will be more than happy to lead you through the process of buying an eBook through our website. Or, you can click here for a tutorial on buying a Google eBook through us.

We want to make it as easy as possible for our customers to access the books they want to read–whether they be hard copy or digital. We just hope our customers will make it possible for us to continue to stay in business. The Kindle doesn’t help. But other reading devices can aid in our continued existence in this evolving industry.

-Devon