Docucopies.com Refuses to Collect California Sales Tax

SAN LUIS OBISPO, CA—July 18, 2012—Docucopies.com, an online digital printing company, will stop collecting California sales tax effective immediately. The company recently opened a production center in San Luis Obispo, CA, which cut its delivery time from four business days to one on most of the West Coast. Unfortunately, its physical presence in the state makes Docucopies.com subject to California commerce laws that require the company collect sales tax from any customer whose printing products are delivered to California.

Previously the company, which is incorporated in Minnesota and has their headquarters in Wisconsin, only collected sales tax for work delivered to WIsconsin customers.

Docucopies.com’s management understands the state’s massive budgetary problems, but thinks collecting sales tax on e-commerce is the wrong way to solve them.

“We’re helping the economy, first and foremost,” says President and CEO David Pressley. “We help schools, small businesses, non-profits and even government agencies save tens of thousands of dollars while bringing more money into the San Luis Obispo community. We don’t think it’s fair to ask these customers to carry the burden of sales tax when it was the governing bodies, not the private sector, who got themselves into this budget problem in the first place.”

E-commerce is one of the sectors of the economy which is still doing well and growing. Over the last five years Docucopies.com has nearly doubled their work force. Requiring online companies to collect sales tax is one way government could stifle this sort of growth, says Pressley.

The company is working with its CPA and legal firms to investigate the legality of this move. For the time being, though, it will not be charging sales tax.

The sticky issue of sales tax on e-commerce transactions is nothing new. The online retail giant Amazon.com fought a lengthy battle with California over the last couple years regarding their sales-tax-free approach. The Federal Trade Commission also have their eyes on the issue, and many experts say it’s not a matter of if, but when, federal and state governments will begin taxing all Internet transactions. Until then, fighting against the tax remains in the domain of a handful of enterprising businesses.

Comments
  • mike

    i think California may make a example of them

  • my print and copy

    I have a traditional shop in Massachusetts and have to charge sales tax to my customers. I have a stake in my community and am an employer in the community just like this large online company who has cost just as many local jobs in traditional shops as they have created. Why they are entitled to a competitive advantage?

    Rich from MA

  • Brent Clarke

    This article makes me sick! What makes them think they should be exempt or so special?
    It won’t be long before all the States with the FTC require appropriate state taxes be collected at time of shipment regardless of where the product is being manufactured and shipped to. Companies like this break the law and use it to gain overall cost advantage against a company that respects the law. I hope you are right Mike!.

  • Rod

    Think of it more as a 7.75% discount for new customers..They’ll ultimately lose and have to pay the tax and in the meantime look at the press they’ll be getting and the customers it will drive to their site. Not to mention the tax revolt minded customers that will come just on principle… brilliant Mr Pressley.

  • Rick Koh

    I do not understand why the lawmakers aren’t going after ALL online businesses to collect sales tax. What makes them different than local bricks and mortar businesses?

  • Printer

    Funny article – I guess by that logic none of us should pay any taxes – Its not my fault that the government need money to operate… Good luck Docucopies… I have a feeling you will soon understand the meaning of Nexus… it will be an expensive lesson for you in the end. By the same logic – why were you collecting WI sales tax?

  • Jim

    As a print shop owner in San Luis Obispo who collects sales tax, I deeply resent that they would be allowed to not collect sales tax. Why should the State give them a 7.75% price advantage over local competitors.They chose to be in California to shorten their delivery times and they should have to play by the same rules as everyone else.
    And as for adding to the local economy..please. Those sales revenues don’t stay here, they go straight back to Wisconsin. They just suck up local municipal services without helping to pay for them

  • Michael Jahn

    I was always under the impression if i manufactured something in one state, then shipped to another – we did not have to collect sales tax ONLY if the person was a broker and was re-selling. Then, that burden fell on them to collect the tax. Each state has its own laws. Here is a PDF form that expressly points out when and if you need to collect tax when you ship printed material in Texas:

    http://www.window.state.tx.us/taxinfo/taxforms/01-157.pdf

  • James

    Docucopy might be doing this as a publicity gimmic, however California is probably the WORST state to try and lock horns with over this law–they’re ruthless. Not only will they have to pay the tax retroactively, they’ll also have a hefty fine tacked onto the top. I also agree with Jim. I work in a print shop just down the coast and when we ship something within California, we collect sales tax.

  • Tom

    In Alabama we have to collect and file sales taxes for every municipality we deliver to as well as the state and county. There are over 40 different cities in Jefferson Co. alone of which Birmingham is the largest. When the internet big shots have to keep up with that much bookwork for every state and city they ship to the playing field will level out considerably. I hope California sticks it to them good.