Could Powell's Books Weather The Storm Of Measure 97?

Powell’s Books president and owner Emily Powell is unsure Powell’s could survive the Gross Receipts Sales tax, known as Measure 97, she told the Business Tribune. With more than $25M in annual sales, Powell’s will be obligated to pay a hefty amount this year if the measure passes.

In addition to the direct liability the Gross Receipts Sales tax places on Powell’s, the shop is expecting price hikes from the power company, publishers and wholesalers as they also try to cope with the added tax burden. Pacific Power is telling customers they will be passing along the cost. Powell is unsure of how publishers and wholesalers will react, but she doesn’t think they’ll continue offering the discounts they have in the past.

Powell says the money to pay for the tax liability will likely come from services, meaning hours, customer service and inventory will be cut back. Personnel might have to be trimmed to stay afloat. Increasing prices to push the tax burden to the buyer, as Pacific Power will be doing, is out of the question. Prices are set by the publisher and printed onto books, so there isn’t any wiggle room there. Book stores have struggled with competition from online retailers, such as Amazon, which has even started to move into their brick-and-mortar space.

Sales at Powell’s Books could decline as heightened costs of necessities like groceries and utilities cut into discretionary spending. Measure 97 will go on the ballot this November and, if passed, would bring in an estimated $2.65B each year. These funds are supposed to go toward education, but will be a part of the general fund and could hypothetically be used for anything. [BT]