Shopatron Comes Out in Support of California's eCommerce Tax

SAN LUIS OBISPO, Calif., June 6, 2011 /PRNewswire/ -- Last week the California state Assembly passed AB155, a bill designed to close a tax loophole enjoyed by consumers and online retailers for decades. If AB155 passes into law, it will mean items bought online in California from many out-of-state e-retailers will be subject to the same sales tax as items purchased from retailers located in California.

(Logo:  http://photos.prnewswire.com/prnh/20101109/SHOPATRONLOGO)

It's a familiar scenario. Your local retailer helps you find a pair of shoes you like, but you forgo purchasing until you have had a chance to compare pricing online. The online price for the shoes is the same, except the shop doesn't charge sales tax, effectively giving you a 8.25% discount, so you buy online. You have benefited from the customer service and knowledge of your local retailer, yet you ultimately give your money to an out-of-state retailer. The local retailer, required to charge sales tax, can't compete.

Twenty years ago, when Internet sales were in their infancy, the tax revenue from online sales was marginal. But, as eCommerce has ballooned, so has the amount of lost tax revenue. In California, collecting the 8.25% tax on qualified transactions could amount to 1 billion dollars in increased revenue for the state this year.

Yet eCommerce giants are up in arms over AB155 and similar laws in other states. In some cases they have even pulled their business out of states where these tax laws are enforced. Shopatron has a different opinion.

"Shopatron is in favor of the passage of this bill in California and bills pending in other states, as it removes what is essentially an artificial subsidy for online retailers," says Shopatron Founder and CEO, Ed Stevens. "We believe everyone should be responsible for paying their fair share of state and local taxes, and that customers who purchase locally should not be punished with higher prices."

AB155 would open the door for local retailers to regain competitive advantage. Research has shown that, although Internet sales are growing, a large majority of shoppers prefers to purchase offline. By winning back customers lured away by tax-free online shopping, local retailers should see sales increase. They have always had an advantage when it comes to personal service and support; giving them equal footing on taxes should allow them to compete fairly with online retailers.

About Shopatron

Founded in 2001, Shopatron is the only eCommerce solution in the world that can drive more online sales while, at the same time, increasing a company's sales through the retail channel. Working with almost 1,000 brands and 12,000 retail partners across 35 industries, Shopatron offers an innovative and flexible approach to eCommerce that matches the unique needs of branded manufacturers and multi-channel retailers.

Shopatron clients include top brands such as Louisville Slugger, Suzuki, Polaroid, Mizuno, Ducati and Sport Chalet. The company is headquartered in San Luis Obispo, Calif.

SOURCE Shopatron, Inc.