Roger Christian - University Camera - Iowa City, IA, USA - ucamera.com

Bill:

Amen on the sit-downs in the both.

It appeared the biggest time-waster at the show was the everything-enabled phone in which these people seemed to be so absorbed.

I stopped and talked to a couple of first-timers (well, I didn't know they were first-timers), and asked why they were there if they weren't out in front greeting EVERYONE who came by.

Otherwise, I told them, they may as well pack their tent and head back home NOW.

My next pass by the booth showed they had gotten the message.

Good to see you, congratulations on your award and thanks for your help, support and friendship for 20+ years.

Angela Ciliberto Director of Operations C-Direct Pty Ltd

Subject: RE: The missing link - from this morning's newsletter

Hi guys,

Good luck with this campaign, however the Australian campaign against tax free imports on line has been unsuccessful and our government failed to respond to our local campaign.

Australian retailers and distributors are battling against online cheap imports also.

In our market we also have to contend with the notion that we can afford to pay more therefore the prices to distributors and retailers is higher again than what our US cousins are paying.

It's time manufacturers realised it's a global market Australian consumers are well equipped to shop online and if manufacturers want local representation of their products they need to get on board. Invisibility will not help online sales either.

Best Regards,

Angela Ciliberto

Director of Operations C-Direct Pty Ltd

Bill's thoughts on this topic:

Country specific pricing is coming under immense pressure. The web and parcel delivery has made global pricing irregularities transparent and consumers aren't buying it. Think New Zealand next to Australia, Canada/USA or even the UK compared to EU. Smaller markets have higher per unit costs of doing business. Manufacturers had a rationale for charging more. Governments added expensive work rules and mandatory benefits which has caused increased costs for that local economy. As Greece and others are finding out, restrictive and unrealistic governmental work rules may keep short term jobs but long term cause immense pain and economic disaster.

B&H is a worldwide powerhouse. Australian retailers told Bill that high management of Canon Australia reported B&H buys more from Canon than all of Australia. True or hyperbole? These retailers believed the source as very knowledgeable and credible. New names are popping up in Hong Kong and other overseas markets with alleged direct connections to major CE factories solely to ship into countries with high costs of doing business.

The answer? Hard to see the future but we've listened in on too many manufacturers' conversations about closing smaller country operations and consolidating their sales/marketing offices in the larger country. This reduces costs and allows the manufacturer the economies of scale. It also reduces the support and attention consumers and retailers receive in the smaller countries.

Dale Farkas - Dale Laboratories - Hollywood, FL, USA

Hello Bill,

I know that the majority of photo specialty dealers would like to see interstate sales taxes imposed by the Federal government, where businesses in one state are required to meet the sales tax requirements of other states and collect and remit sales taxes. You are espousing that view in your newsletter. Dealers view this tax as a way to level the playing field against online retailers (under the pretext of providing more taxes for their states).

I have to take a contrarian view.

The Founding Fathers specifically prohibited the imposition of Interstate tariffs, which these taxes represent. Their reason was simple. They wanted to create one large economic entity where no state would put a burden of taxation on the citizens of another. So, Virginia was prohibited from stationing a tax collector on the turnpike from Maryland...as were all the other states relative to their neighboring states. Their foresight in prohibiting interstate tariffs helped to create the economic prosperity of our country.

Yes, this was before the time of computers, where sales taxes for various states could be collected. But, even with computers many states have extremely complex sales tax codes. Certain counties charge more for sales tax than others...and ZIP codes don't follow county lines...making the implementation of interstate sales taxes complicated. So, the likelihood is that the sales taxes charged by one state to stores in another would be at the highest tax rate of the state that wants taxes to be collected.

Therefore, I'm against this sales tax across state lines from a constitutional, historical and national-good point of view.

I'm also against it pragmatically.

We have two businesses under our roof. Our direct mail photo lab has customers in all 50 states, Puerto Rico, DC and the U.S. territories. We also do an international business (which requires complex and time-consuming customs documents). Our camera sales outlet sells photographic equipment over the Internet and by incoming phone orders to the same dispersed geographic area. Yet, we still consider ourselves a small business. Collecting sales taxes for fifty different states, plus the District of Columbia and U.S. territories and commonwealths would be an onerous task.

Let's put this in terms of your newsletter. All you charge for this newsletter is a submission of one idea per year. You don't charge a specific dollar amount. But, let's say you charged $1 per month to each of your subscribers. How would you like to be responsible for generating 52 reports and mailing out over fifty checks every single month? Assuming that you would be dealing with each state or government entity separately this would require approximately 52 reports (including DC & Puerto Rico). So, in a year your reports and checks would be multiplied by 12 for a total of 624 checks/reports mailed out per year.

You would have to pay for the accounting labor to create the reports, plus postage, plus bank fees on the checks. How many hours and dollars would this cost your business?

Ask nearly any business owner what he wants and he'll tell you he wants the government to stay out of his business. How would you (and the other dealers who want this penalty tax against B&H and Amazon) like to have a government requirement that you must create as many as 624 reports and cut that many additional checks each year? Remember, that this interstate tax cuts both ways. Any company that does any interstate business would be subject to its requirements.

An interstate tax requirement may not be a big deal for Amazon (in terms of the work or extra reporting and check-writing expenses)...but it sure would be for us! (Since our photo lab business is separate from our specialty camera business we'd have 1248 reports!)

You're welcome to edit this in any way you want. I'd just like you to understand that there are those of us in the industry who are very much against having more government requirements placed upon our companies. This sales tax thing would be a biggie. So, I'd ask you and your readers to rethink this "holy cow" of the specialty camera dealers.

Best regards,

Dale

Professor McCurry weighs in:

We don't claim to be lawyers and we're not politicians - we should clarify the points Dale raises . . . first, we'll totally pass on trying to determine what the intention of the US constitution says. Most of the time The Supremes can only decide cases by a 5-4 vote . . . .

Congressman Womack is sponsoring one bill (with Congresswoman Speier - Republican and Democrat, respectively) that has a minimum threshold for reporting of $1,000,000 in internet sales or $100,000 per state. All the proposed legislation we've seen calls for single sales tax rate for each state and simplified payment processes. If these things are important to you then include them in your communication with your elected representatives.

From this discussion also came an anonymous voice wanting to raise the issue of bigger trucks on residential roads. She claimed her street needs repair from cracking asphalt but her town uses sales tax money for local road repairs. . . yes, you get the connection - she's blaming larger UPS trucks bringing internet packages at Christmas for her roads - these trucks pay gas tax but nothing into her local town's treasury . . . she ended saying that the pressure on the town landfill was also growing with packing materials from the internet shipments bulking up the waste stream much more than retailers' trash would.

Howard Copeland - Scott Camera and Photography - Peekskill, NY, USA

Bill - would a more positive strategy be to move for the elimination of all sales tax since it is no long able to function as intended?

Certainly such an approach serves to put retail businesses on the side of the consumer, seeking to reduce the prices they pay for merchandise.

Your editor, who lives in the sovereign state of South Carolina, just received this e-mail from Amazon:

Hello from Amazon.com,

As you may or may not be aware Amazon.com LLC is not required to collect sales or use taxes in all states, including the state of South Carolina.

The South Carolina Department of Revenue requires us to provide the following notice to you: You may owe South Carolina use tax on purchases you made from Amazon.com LLC during the previous calendar year. The amount of tax you may owe is based on the total sales price of the items you purchased during the previous calendar year. The total sales price of only purchases you had shipped to South Carolina in 2011 was $59.58. This is the amount that you may include on your South Carolina income tax return to calculate the appropriate use tax owed unless you have already paid the tax.

While Amazon.com LLC does not report this information directly to the state of South Carolina we are required to provide this information to you based on South Carolina law Section 12-36-2691(E)(3).

As purchases from Amazon.com LLC can be made through various sales channels, we have included directly below your breakdown of purchases from the various channels.

Total sales from www.amazon.com $59.58

Please note the following:

The total sales represent all orders that were shipped to South Carolina during 2011.

Your purchases are subject to use tax unless an exemption exists under state law or you have already paid the tax.

A sale is not exempt under state law because it is made through the internet. (editor's bold face)

This information should not be used for any federal income tax reporting purposes.

We are required to provide this notice in accordance with South Carolina law Section 12-36-2691(E)(3).

Notifications were sent to customers that had purchases delivered to South Carolina. If you are not a resident of South Carolina, the most common reason for receiving this notification is that you may have sent a gift to a recipient in the state.