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Who would win or lose on online sales tax

Monday, May 6th, 2013

Source: USA TODAY

Major retailers and local stores will be the big winners if the House follows the Senate and requires Internet retailers to collect sales taxes on online purchases.

National and regional chains are tired of being showrooms for shoppers who then search their smartphones for lower prices and buy online. The chains say they are at a 5% to 10% price disadvantage by having to charge sales tax.

“Retailers compete for customers on many different levels, distribution channels and fronts, including service and selection, but they cannot compete on sales tax,” says Stephen Sadove, chairman of the board of the National Retail Federation and CEO of Saks Fifth Avenue. “Retailers of all shapes, sizes and channels deserve a level playing field.”

Local stores are sick of having to compete with online retailers who only have to charge sales tax to consumers in states where they have a physical presence.

“For too long the Main Street retailers that are an integral part of their communities have faced tax rules that put them at a disadvantage to their out of state, online-only competitors,” said Bill Hughes, government affairs chief for the Retail Industry Leaders Association.

And states would get new revenue. According to research from the University of Tennessee, states are missed out on more than $11 billion in uncollected taxes in 2012 from online purchases, .

It’s Web retailers that sell more than $1 million a year — the threshold set in the law for sellers to collect the taxes — to out-of-state buyers that will feel the biggest pinch. They say it’s too burdensome to collect taxes for multiple states, even with state-provided software called for in the bill. Some say they will need more employees just to deal with sales tax; many say they will have to rethink their whole business strategy.

Ebay.com, where many small retailers conduct their businesses, has been one of the the loudest opponents of the legislation and vowed late Monday to keep lobbying to bring “greater balance to the legislation.”

Small businesses with less than $10 million in sales or fewer than 50 employees should be “protected from new burdens that harm their ability to compete and grow,” said Brian Bieron, Ebay’s senior director of global public policy.

Shoppers, of course, will get dinged. They already are supposed to be paying tax on their online purchases when they file their state tax returns, but few ever do. And some experts doubt their online buying habits will change much because of sales tax.

“At the end of the day, people love shopping online,” says Lisa Lee Freeman, editor in chief of Consumer Reports’ ShopSmart magazine. “There will be some initial promotions to counteract the taxes and then it will be back to business as usual.”

Some businesses that are neither major chains nor mom-and-pops, also see a benefit in a national tax approach. David Bolotsky, CEO of UncommonGoods.com, says his gift-oriented site sells more than $10 million a year to consumers outside of his home state of New York.

As it is now, “we have to monitor all the rules and spend money on lawyers trying to make sure we are in compliance with every state’s regulations,” says Bolotsky, a former head of retail research at Goldman Sachs.

Copyright © 2013 USA TODAY, a division of Gannett Co. Inc.

Stores’ surveillance cameras can help crack crimes

Thursday, April 18th, 2013

Source: USA TODAY

If retail video cameras help authorities identify suspects in the Boston Marathon bombing, it will be only the latest non-retail crime that store surveillance helped crack.

Video from Boston Lord & Taylor cameras was among footage being examined by investigators as they try to identify possible suspects.

Lord & Taylor would not comment other than to say that it is fully cooperating. But Joseph LaRocca, a retail security expert, says large retailers in urban areas typically have closed-circuit TV cameras that pan and tilt to capture activities outside the stores.

“The cameras will move around and zoom in on people and incidents of interest,” says LaRocca of loss-prevention firm RetailPartners in Los Angeles. And retailers regularly turn video over to police when it is requested or if they detect criminal activity in or outside their stores, he says.

The January 2011 Tucson shooting of former U.S. congresswoman Gabrielle Giffords and others outside a Safeway supermarket was captured clearly on the store’s video, says Richard Kastigar, investigations chief for the Pima County Sheriff’s department, who reviewed it.

Footage showing convicted gunman Jared Loughner enter the store with another man raised the prospect of an accomplice until the man was determined to be the cab driver who brought Loughner to the store. Video showed Loughner placing plugs in his ears before walking outside. The expression on his face “showed the determination of the shooter” and “what his intent was” as he walked from victim to victim, Kastigar says.

The case underscored that retail video can be critical for investigators, prosecutors and juries, Kastigar says. “One of the first things we do is a 360 assessment as to what potentially might be around a crime scene taking video,” he says. “We don’t know where all the cameras are, but when there’s a convenience store or other business and even some homes, the likelihood of video cameras is great.”

Retail surveillance gear can be so sophisticated that cameras can record as far as half a mile away, says Rich Mellor, vice president of loss prevention at the National Retail Federation.

Store cameras have helped in investigations including child abductions, robberies, drug deals and car thefts, Mellor says. Last year, cameras at stores including Costco and Walmart captured drive-by purse-snatchings in which victims were dragged and injured.

“This is a really important aspect of what retailing does,” Mellor says. “There are crimes that are solved every day as a result of their video equipment.”

Some retailers go even further than cameras. Target has its own forensics lab where it analyzes video or fingerprints related to retail crime and often helps law enforcement with other cases not necessarily related to the retailer, says spokeswoman Jessica Stevens.

Many consumers, however, don’t realize just how often their movements are being recorded and there are larger questions about the expanded uses of such surveillance, says Marc Rotenberg, executive director of the Electronic Privacy Information Center.

“It is possible to collect an enormous amount of information about people doing nothing suspicious,” says Rotenberg, also a Georgetown University law professor. “There’s a difference between a focused and a dragnet-style surveillance.”

There should be a “meaningful evaluation of its effectiveness” of public surveillance, he says: “It’s still very much an open question.”

Copyright © 2013 USA TODAY, a division of Gannett Co. Inc.