Bay Area Businesses Demand 'E-Fairness'

Bay Area business owners and California Teachers Association representatives gathered at Palo Alto Bikes Wednesday to denounce Amazon.com for circumventing California sales tax laws.

“We can’t allow the scofflaws like Amazon to say they’re not going to pay taxes,” said Don Dawson, California Teachers Association Board member, who represents educators in Santa Clara County. 

“Their failure to follow the law will help contribute to wide-scale cutbacks to essential school programs, making it difficult for educators to do their job and educate our children,” Dawson added.

Local possesses an unfair advantage over brick and mortar stores that have to pay taxes to the state of California for each transaction. Those taxes help fund public schools, Dawson said.

When Californians purchase items on Amazon, they often do not have to pay sales taxes. But, they would, if they purchased it in person at a physical store, said Jeff Selzer, owner of Palo Alto Bicycles.

“We're incentivizing people to not buy locally,” Selzer said  “The state says that I have to collect sales tax; and whether or not I collect it, I have to pay it. All we’re looking for is parity," he explained.

Seattle-based Amazon is circulating a petition to California voters that would preserve its exemption from state sales taxes. If it gathers enough signatures, voters would decide by referendum whether they should pay sales taxes on online purchases.

As it stands, the online retailer does not have a physical presence in California, so has not had to collect sales tax on items purchased or sold by Californians until this year.

In June, Governor Brown approved a bill that would force online retailers that sell tangible property to Californians to charge a tax on those items and give it to the State Board of Equalization.

Local retailers say that is only fair.

Clark Kepler, owner of Kepler’s Books in Menlo Park, CA, was on the verge of closing his store almost six years ago after his customers shifted their purchasing behavior. Many of them were turning to online retailers to purchase books and told him so. 

“When people would come up to me, they’d tell me that they felt guilty for shopping on Amazon,” Kepler said.

But people from all over the Peninsula felt the store was too important to the community to close. Patrons pooled their money and gave it to Kepler so he and his wife could keep the lights on at the store. Many of them told Kepler that they’d never shop on Amazon again.

Kepler and the other business owners who gathered at Palo Alto Bicycles say people choose to live in communities such as Palo Alto and Menlo Park because they can visit independently owned bookstores and use bikes for daily commutes.

“We have a culture of cycling here on the Peninsula because we have bike shops,” said Mike Jacoubowsky, owner of Chain Reaction Bicycles, which has stores in Redwood City and Los Altos.

“It takes a certain amount of support to keep cycling alive, including having a bike shop that people can physically enter. As long as we make it easy for people to enjoy cycling, they do it, otherwise they find other things to do,” Jacoubowsky said.

Jacoubowsky said he is aware that all the stores on the Peninsula are competing against each other as well as online retailers.

"We just want to compete on an even playing field."