Open Letter To The Governor And Legislature

As the owner of Phoenix Books and Café, an independent, locally owned bookstore in Essex Junction, I am urging you to support H.661. We employ three full time and seven part time employees. This e-fairness legislation would clarify state laws to require non-Vermont merchants with online affiliates in the state acting as sales agents on their behalf to collect sales tax on purchases shipped to Vermont. The bill would play a role in establishing sales tax equity for Vermont businesses and would help secure needed revenue to support essential local services. It is very similar to legislation enacted in New York and Rhode Island.

The tax avoidance being practiced by these out-of-state retailers is unfair to the retailers throughout Vermont that are collecting sales tax for online sales, and it has clear economic implications for the state, especially considering the current economic climate. It is no secret that Vermont is projecting a huge gap of $28 million. This deficit is only going to grow worse if states continue to subsidize out-of-state businesses by allowing remote merchants with nexus in Vermont to skirt existing tax laws, thereby letting millions of dollars in sales tax revenue go uncollected.

At a time when Vermont is expected to lose more than $21 million in sales tax revenue to out-of-state retailers in 2010, it seems crazy that the state taxing authorities are allowing these out-of-state retailers to get away with this tax dodge at the direct expense of in-state businesses and communities.

The results of sales tax inequity create a ripple effect seen throughout Vermont's economy, resulting in higher property taxes and budget cuts for police and fire departments. For the good of in-state businesses -- and all of the residents of Vermont – I hope that you will take a stand for equity and support H.661, which will require out-of-state online retailers with nexus in Vermont to collect and remit sales tax.

I have owned and operated an independent bookstore in Vermont from1996 to 2003 and opened Phoenix in November of 2007. I have never considered Vermont to be an unfriendly state for my local business but this tax inequity is extremely unfriendly to bricks and mortar stores. Why wouldn’t the state turn over every stone in an effort to collect taxes already owed? Why would the state subsidize these out of state companies by allowing them a 6 or 7 % competitive advantage over my taxpaying, tax collecting, mini economic engine? Why put my sizable investment at risk to the ever encroaching use of the internet for commerce? And what do you suppose will happen to sales taxes when all of us bricks and mortar retailers have gone the way of the Dodo bird?

Sincerely,

Mike DeSanto
Owner
Phoenix Books and Café
Essex Junction, VT 05452