Merriam-Webster defines accountability as, “an obligation or willingness to accept responsibility or to account for one’s actions.” This is a life lesson we’ve all learned
It is important to correct several claims made by Bill LaMarr in his post on this website. He argued that small businesses will be harmed by e-fairness; actually, small businesses have been harmed by the lack of e-fairness.
E-fairness means that all retail sales are treated the same. Whether a product is sold in a store or online, tax collection is treated the same way. Unfortunately, online-only retailers don’t collect the sales taxes, while their competition is required to do so. As a result, they are able to offer a much cheaper price than brick-and-mortar stores for the exact same product. For over a decade, small and large businesses have been asking for e-fairness at the federal level. More recently, e-fairness has been pursued at the state level. As e-commerce continues to grow, it is important to update our laws so they are consistent with 21st Century commerce.
Without it, small businesses that create jobs, pay their taxes and invest in the community will be forced to close their doors. More and more often, California employers are treated like showrooms where customers come and test out their products and then purchase online from an out-of-state, online-only retailer in order to avoid paying sales tax. Customers are actually required to remit the sales tax from these purchases to the state tax board, but most do not.
Today, in California, workers and families are struggling in way they have not in recent memory. With 12% unemployment – second highest in the nation – many workers cannot find jobs to pay the mortgage and cover basic expenses like food and clothes. In addition, nearly seven million Californians are uninsured meaning few families can afford the medical care they need and many do not have access to doctors outside those in hospital emergency rooms.
In light of this, legislation that requires a prescription to purchase common cold and allergy medications with pseudoephedrine (PSE) is misguided and would punish those who need care the most. Making basic medications like Claritin-D and Sudafed accessible only after seeing a doctor would unnecessarily increase costs and place burdens on those who can least afford it. A prescription mandate would force students and workers who depend on these medicines to miss days in the classroom and hours on the job exacerbating already difficult situations.
And for those without insurance, the inability to obtain routine medicines they and their family depend on would result in ailments turning to sicknesses requiring immediate care, which would place additional strains on local hospitals, many of which are reeling from recent budget cuts. During allergy season, these numbers could grow significantly and impact Californians suffering from asthma and allergies.
At the California Retailers Association, we believe the first step to economic recovery is creating a positive environment for businesses. In this economic crisis, we need our legislators to focus on ways to encourage businesses to move to California and to expand and grow in this state.
Today legislation by Senator Juan Vargas (Senate Bill 469) will be heard in the Senate Governance and Finance Committee that will severely hamper businesses that generate thousands of jobs across the state. This legislation is bad for our state and bad for business.
First, our state is facing a massive fiscal crisis with an over 12 percent unemployment rate and an estimated $24.5 billion deficit. So we all need to be working together to create economic opportunity and new jobs which will then lead to increased revenues for the state. We do not need legislation that will actually discourage businesses from expanding in our state and adding jobs. Just one new large store opening leads to hundreds of local jobs and more sales tax revenues. That’s exactly what our state needs right now.
As the President of the California Retailers Association, I represent businesses with more than 9,000 stores throughout California. These stores provide thousands of jobs, billions in revenue and countless products for the people of California.
That’s why we support e-fairness legislation, such as AB 153 (Skinner) and AB 155 (Calderon). Right now, retail businesses that have e-commerce sites are required to collect sales taxes. So if any one of our stores also sells its products at a physical store or online, they collect sales taxes, no exceptions.
But out-of-state, online-only retail companies like Amazon and Overstock don’t play by these rules. A loophole in the law has helped them avoid collecting and remitting these sales taxes. This gives them an unfair and artificial competitive advantage of nearly 10 percent over California retailers who operate e-commerce sites in addition to their brick-and-mortar stores.
The holiday season has just ended and it has been reported that retailers overall experienced an uptick in sales from the previous year. This would be good news for California’s small businesses.
Unfortunately, California’s outdated e-commerce laws allow for out-of-state, online-only retailers to thwart the law and deliberately refuse to collect the sales tax so that they can gain an unfair advantage over California small businesses. This has resulted in a less than sweet holiday season for the small businesses in our state.
The practical impact of this loophole is vast. Job creators are harmed as they are treated more and more like showrooms where customers determine what they want to buy and then purchase it online to avoid the sales tax. This translates to approximately a 10 percent advantage over small businesses located in our state.