Earlier today I went to the state capital building in Santa Fe, New Mexico to speak out about House Bill 50, the New Mexico equivalent of the “Amazon Tax”. This is my account of the afternoon I spent in the halls of government.
On Thursday, January 28, 2010, I attended the meeting of the House Business and Industry Committee. The meeting was scheduled for 1:30pm in room 309 at the state capital building in Santa Fe. Right up front, let me say that I'm not familiar with the terminology and procedures of government committees. I apologize in advance for mangling the terminology and mean no insult by it.
It was a close call, but I made it to the meeting room on time. I was, in fact, the first person in. I thought for sure that it would be a pretty empty room, since I was alone there (except for a few staffers) just a few minutes before 1:30. Apparently, they don’t believe in starting anywhere near the posted time, however. More citizens and lobbyists filed in, but no House members showed up until 2:30. I overheard someone say that they were just late getting back from lunch. I hope that wasn’t the case.
The committee room was much like you may have seen on television, only at a much smaller scale. The committee members sat in a semi-circle facing the audience, and there was a table with a microphone in the center of the room facing them. This table was used by the authors of the bills to answer questions put forth by the committee.
The committee roster was as follows: Jim R. Trujillo (D), Eliseo Lee Alcon (D), Jose A. Campos (D), Dona G. Irwin (D), Andrew J. Barreras (D), Sandra D. Jeff (D), Vice Chair Thomas A. Garcia (D), Chairwoman Debbie A. Rodella (D), Thomas C. Taylor (Minority Floor Leader, R), Jane E. Powdrell-Culbert (R), Keith Gardner (Minority Whip, R) and Shirley A. Tyler (R). The team has a combined batting average of .351, and has won several division pennants.
House Bill 50, the Internet Sales Gross Receipts Bill, was third on the agenda. I won’t bore you with the details of the first two bills; you can read my raw notes at ABestWeb. Suffice to say, it would be nearly 4pm by the time HB50 was discussed.
The bill’s author, Representative Eleanor Chavez (D, District 13, Bernalillo County), took her seat in the center of the room, with an “expert witness” by her side. I regret that I did not make a note of the gentleman’s name. Chairwoman Rodella began the proceedings. Representative Chavez gave us an overview of the bill, and then the audience was asked for opinions.
Supporters of the bill went first – about ten in all. Each raised his or her hand, was acknowledged by the chair, and stood up to give an opinion. Each supporter gave a variation of the same message: I support this bill because I represent [a cause] and the state needs more money to support [the cause]. Not one of them spoke to the particulars of the bill itself or the impact it would have on residents of New Mexico or the businesses that the bill would affect.
Opponents of the bill went next – of which I was the only one. I made my case, that I am a small businessperson in New Mexico, and that the state would not see any additional revenue because the companies the bill seeks to affect would simply terminate their relationships with me rather than collect the sales tax. The state would not benefit, and I would lose the income that I earn working online.
For the following 45 minutes or so, I listened to the debate between the committee members and Representative Chavez and her “expert witness”. It became apparent very quickly that Rep. Chavez was merely copying the basics of the bill from New York and that neither she nor her witness were knowledgeable about the internet, affiliate marketing, taxation, or how the three are related. It was clear at the outset that three committee members were against the measure (others would follow).
Representative Keith Gardner (R) was clearly against the bill, and he had my favorite quote of the afternoon, which I’ll paraphrase here because I neglected to write it down in its entirety: the way this bill is written, wouldn’t Google also be considered to have a nexus in New Mexico because they also refer buyers to sellers?
Vice Chair Thomas Garcia (D) made another great point when he noted that the way the bill was written, simply telling Representative Campos that he bought his tie at a site online (I forget which site he named) would create a nexus. The response from the “expert witness” was that the threshold of $10,000 in the bill would take care of that, but the larger point was made: threshold or not, word of mouth was written into the bill.
In the end, it became clear that the majority of the committee members were not in favor of the bill. Representatives Gardner, Powdrell-Culbert, Taylor, Garcia, Campos, and Trujillo seem to be firmly against it. Chairwoman Rodella asked some pointed questions, but I did not get a sense that she was firmly for or against the bill. The balance of the Representatives had little or nothing to say during the proceedings.
A motion to table the bill was made by Representative Gardner and it was seconded by Representative Powdrell-Culbert. The motion was objected to by Representatives Trujillo, Campos and Alcon, but in a 7-4 vote, the objection was defeated and the bill was tabled. Again, I’m not familiar with the jargon and this was my first time watching a government body in action, so I’m probably mangling the terminology.
Several Representatives mentioned, at various times in the process, that they might support the bill but didn’t for a various reasons: it was too broad, it was too vague, or it wasn’t enforceable. Nobody seemed to be of the opinion that the redefinition of nexus was itself a bad idea, or that taxing online sales was a bad idea. A better-written bill might have passed. My opinion is that unless we have a larger affiliate industry turnout if or when this bill comes back, we could see a very different result.
I did not get any face time with any of the Representatives because once a bill has been resolved, they move on to the next order of business. There were several other bills on the agenda and I had already been there for almost three-and-a-half hours. I needed to get on the road home, as I wasn’t too keen on driving over an hour in the kind of snow we were getting yesterday.
I’ll be following up with Rebecca Madigan of the Performance Marketing Association and will post any other information I have as I get it.
I consider yesterday a win for our industry, and I’m proud to have been a part of it.