July 12, 2001 Borders.com May Soon Be Required to Collect California Sales Tax Following the latest meeting of the California Board of Equalization, it looks very likely that Borders.com will be required to collect sales tax in California. The five-member board met on July 10-12 in Culver City, and during their first day's meeting considered a petition from Borders.com regarding the company's obligation to collect sales tax on e-commerce sales to consumers in California. No final decision was reached at the meeting, but board member Dean Andal instructed board staff to draft an opinion that states that Borders.com must collect sales tax. Andal said at the meeting that he was most persuaded by the fact that consumers who had made purchases from Borders.com were able to return those items to Borders' bricks-and-mortar stores and receive cash refunds. Such policies, he noted, led him to believe that Borders.com had established nexus in California, that is, had established a physical presence in the state, which would require the company to collect state sales taxes. California independent booksellers have long argued that this is precisely the case. Andy Ross, owner of Cody's Books in Berkeley; Bill Petrocelli, co-owner of Book Passage in Corte Madera; Neal Coonerty, owner of Bookshop Santa Cruz and ABA president; and Hut Landon, executive director of the Northern California Independent Booksellers Association (NCIBA) have all met in person with Board of Equalization staff, and other independent booksellers in the state have contacted the board to press for e-fairness. It's expected that the board will issue a ruling at its August 14-16 meeting in San Diego. Allison Pratt, a legislative advocate for the California Tax Reform Association, which has worked in concert with NCIBA on sales tax legislation, attended the recent meeting, and she told BTW, "I'd be very surprised if they granted the petition" from Borders.com. The tax programs administered by the California Board of Equalization are concentrated in four general areas: sales and use taxes, property taxes, special taxes, and the tax appellate program. Board-administered programs provided more than 34 percent of the state's tax revenue and support hundreds of state and local government programs and services, including schools and colleges, hospitals and health care services, criminal justice, correctional, and social welfare programs. -Dan Cullen Topics: Fair Trade Practices, Sales Tax Initiative, News - Bookselling,