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Marketplace Fairness (plus a l’il JPatt)

On the afternoon of Monday, May 6 the US Senate passed bill S.743 – the Marketplace Fairness Act – which would require online retailers making more than $1 million annually to collect sales tax in states that have sales tax laws. The majority of Americans think this is bullshit. I know that you like not paying sales tax when you buy dog coats from L.L. Bean or giant stuffed Pikachus from Amazon, but the good times need to come to an end, buddy. Let me explain why.

Bezos & Pikachu, friends, lovers.

All this time, since the dawn of the Internet Age, if an online retailer did not have a physical presence in your state, then they did not have to charge you sales tax on purchases. In most cases, it was up to you, the consumer, to “do the right thing” and pay your sales tax anyway, via a “use tax” to your individual state. I don’t do this. You don’t do this. No one does this. And no one enforces it either.

Over time, small, local businesses have disappeared from your neighborhood, mostly because they couldn’t compete with large, online, out-of-state retailers who could offer you a “tax break.” The locals have no choice – they have to charge sales tax, or if they don’t, then they have to pay it on all their sales anyway, which kinda sucks when you think about it.

Hence the “Marketplace Fairness Act.” An effective evening of the online retail playing field.

If only it were that simple. To me, the arguments against the MFA are baffling.

The MFA does not mean that life will be harder for small business owners, despite what eBay CEO John Donahoe might tell you. One of his arguments is that small businesses will have a hard time figuring out how to charge the sales tax for states other than their own. Right now, yes, this would be a pain in the ass – but in the bill, there is a provision that requires states to offer free software that will calculate the sales tax for each individual buyer. Although, really, what the hell does the CEO of a $3 billion a year company care about how hard things are for small businesses? Also, if we’re truly talking “small business,” I refer you to the provision that exempts retailers grossing less than $1 million per year from having to collect sales taxes from states other than their own at all. (Section 2c: Small Seller Exemption) Point, moot. 

I almost don’t want to mention this because it’s so ridiculous, but the MFA also does not mean that the government will tax you on your 401(k). Right wing fear-mongering.
Nor does S.743 mean that your taxes will go up or that new taxes will be enforced. Actually, this argument is the one that that infuriates me the most – the “your life will become more expensive” as a result of the Marketplace Fairness Act argument. Bullshit. YOU’RE ALREADY SUPPOSED TO BE PAYING THOSE TAXES. It’s definitely NOT raising anything, idiot. Yeah, you, Grover Norquist.

Sec 3(d): Nothing in this Act shall be construed as encouraging a State to impose sales and use taxes on any goods or services not subject to taxation prior to the date of the enactment of this Act.


The tax-free haven of the internet has made your life “easier,” I’m sure, but it has also closed thousands of local businesses who can’t compete with online retailers who don’t charge the tax or contribute to your local economy in any meaningful way. It’s one thing to oppose sales taxes in a general, libertarian way, but another to oppose the enforcement of the collection of sales tax for every retailer who sells product in your state.

Just shut up for a second and think about that. If you bought everything in your life from a tax-free online retailer, what would your local economy look like?

Don’t be fooled by the fact that Jeff Bezos and Amazon are in support of the MFA – in light of several states fighting them to collect sales tax in the last year or so, Amazon just wants to make the collection easier and across the board. The do not have your local economy or your small businesses in mind hereall they care about is making sure that everyone has to follow the same rules, since they’ve been getting slammed on a state-by-state basis of late. (See the nexus laws in California, New York, or Connecticut, for examples.)

This is a long road still ahead – there is very little chance that the same bill will make it through the GOPcontrolled House of Representatives. (See H.R. 684) The American Booksellers Association is encouraging all member stores – and their customers, I would hope – to contact their local representatives and ask them to support HR 684. I would urge you to do so. The best part of all of this, to me, is this – an aspect that I never considered when all of this started coming up: the legitimate return of consumers to their local, brick-and-mortar stores. Shown here in a hot graphic from Mashable:

Welcome home, everybody.


In a related story – and I know that there are some of you out there who have been dying for my take on this, I’m sure – old Catapult friend JPatt has been all up in everyone’s face over the past couple of weeks, not specifically about the sales tax issue, but in more of a broad-sweeping temperature-taking of the book industry.

In an über-aggressive ad campaign that he financed himself, James Patterson placed ads on the back page of the Sunday New York Times Book Review on April 21 and one on the front cover of the April 22 edition of Publishers Weekly. The main portion of the ads read, “Who will save our books? Our bookstores? Our libraries?” JPatt in Salon:

I don’t think anyone thought through the consequences of having many fewer bookstores, of libraries being shut down or limited, of publishers going out of business… 

Well, some of us did – and have been thinking of NOTHING but that fact for the last decade, but I hear ya, JPatt. My problem isn’t with his message, but where he placed that message – and who he pushed it at. Readers of the New York Times Book Review and PW are already in the life raft. This isn’t an elitist thing, it’s just that the readers of magazines like PW are already in the industry itself somewhere – we get that books, bookstores, and libraries are in deep trouble. We talk about this ALL THE TIME. This fear is is what keeps us up at night and gets us up in the morning.

If JPatt wanted to make a significant difference, he should have placed his ads in People magazine or USA Today or Cosmo. He should have placed ads on television. (Don’t get me started on the correlation between JPatt and TV.) Use some of the boatloads of cash you have and put a big-ass ad up in Times Square. Again, I don’t mean to be snobbish or elitist here. Just put the message in front of people who don’t already know that bookstores and libraries are quickly fading from the national landscape. They are out there, they just don’t subscribe to Publishers Weekly.

Better yet, he could have pulled his books off of Amazon.com. You want to stop the death of bookstores and libraries, yank your ebooks off of Amazon, pal. (JPatt was the first author to sell over 1 million Kindle versions of his books.) Make them available exclusively through independent booksellers if you really want to make a difference. You think your readers won’t find the books that way? Then there really IS something wrong in America.

From the Salon interview:

I don’t think we have a real strong spokesperson in the publishing community, someone who can stand up. I’m stepping up a little.

A little? Not good enough, homie. You made $94 million in 2012 on the backs of your shit-tastic novels. I’m not saying that I’d expect more from you, but… I’d expect more from you.


One comment on “Marketplace Fairness (plus a l’il JPatt)

  1. SuchSmallSteps
    May 21, 2013

    You're right about where he chose to conduct his PR campaign. USA Today, People, The Today Show- all of these would have been happy to take his ads/himself and would have been a better vehicle if he really wanted to sell that message. Or why not do his next tour only to indie bookstores? Or do an exclusive book edition available only at the indies? There are a million things he could have done to give them a boost.

    By the way, I have been seeing those TV spots for his latest book constantly and I can't help but flash back to the 117 days posts every single time…

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This entry was posted on May 21, 2013 by in Amazon, http://schemas.google.com/blogger/2008/kind#post, James Patterson, rant.
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