From: Rita Auerbach <RitaAuerbach>
Date: Sun, 19 Mar 2000 22:51:21 -0500

The Thor Power Tool decision was actually a bit different from the way it was described in the recent posting, though its disastrous impact was quite correctly described. Until this decision (a decision promulgated by the IRS and affirmed by the Supreme Court), publishers did have to pay taxes on their unsold inventory, but the tax was based on the physical value of the books, their paper, covers, etc. As a result of the Thor decision, publishers had to pay tax on the potential resale value of warehoused books--a price so high that books, as mentioned, could not be kept indefinitely in stock if they were not selling. Although the decision, as the name of the case implies, did not directly involve publishers, it was interpreted to include publishers along with other manufacturers.

The posting about "tax and spend liberals" is probably too foolish to merit a response, but it's hard to leave such egregious misinformation hanging out there. The IRS decision was made under a Republican administration, and was affirmed by the courts, not by legislators. In fact, Daniel Patrick Moynihan (Democratic-Liberal Senator from NY), announced his intention to enact legislation that would exempt publishers from this decision, but he was not successful in doing so.

I had always thought of the decision in terms of its impact on reordering books: Before this decision children's books seemed to remain in print indefinitely. I had not thought about its effect on books which needed time to build their readership, and I thank M.J. Wiseman for this insight.

Rita Auerbach, Librarian, Manorhaven School, Port Washington, NY
Received on Sun 19 Mar 2000 09:51:21 PM CST