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.