Online books not taxed: publisher, book seller peeved

Not fair! Locals in the book industry want to to know why they have had to collect a 10 per cent tax and online retailers are not.

Indigo says a technical error is being corrected and company will remit taxes

Matt Howse says books bought online by Newfoundland and Labrador customers did not have tax applied at point of sale on Jan 1. (Sherry Vivien/CBC)

A bookstore owner in St. John's says it is not fair that some online retailers have not been collecting the 10 percent provincial book tax on purchases made after the tax came into effect on Jan. 1. 

"That's certainly not a fair market condition for me to try to operate my business in," said Matt Howse, owner of Broken Books.
    
Finance Minister Cathy Bennett announced in last spring's budget that books would be taxed in the near year in an attempt to raise $2.1 million for the cash-strapped provincial government. 

While local retailers began collecting the tax, booksellers such as Amazon and Chapters did not add it to online orders.

Howse said he checked five days after the tax was implemented and found Chapters.ca was not charging it.

That's certainly not a fair market condition for me to try to operate my business in.- Matt Howse, Broken Books

"In good conscience, I don't know how the province could continue collecting it," he said.

"I'd like to say that I'm surprised ... but I'm not" said publisher Gavin Will, owner of Boulder Publications. 

"They've really put local publishers and local retailers at a huge disadvantage."

Newfoundland and Labrador is the only province or territory in Canada to charge a tax on books. (Sherry Vivien/CBC)

In a statement issued today, a spokesperson for Bennett said the Newfoundland and Labrador government informed the Canada Revenue Agency about the book tax on April 16, one day after tabling the budget.

"The Department has notified CRA about apparent non-compliance and they will be following up," said the statement.

The spokesperson said it is the retailer's obligation to charge the tax and if they have not, they will still be responsible for remitting it to the federal government.

Indigo, the parent company of Chapters, said in a statement Friday that failure to collect the tax online was a mistake.

"We are reviewing the situation and regret that we have identified a technical error that led to the new tax rates not being applied correctly in all instances," wrote Janet Eger, vice president of public affairs.

"We are in the process of making the necessary corrections to our systems. Of course, we will also ensure the tax is accounted for and remitted fully as required by law."