Fascinating story this. I’ve heard and been part of a few conversations about this phenomenon for some time. It is interesting both from the perspective of the booksellers and the publishing, and the state’s perspective. It demonstrates the way that external actors can undermine a state’s tax base. I wonder if, like in some US states, the government will actually start imposing a sales tax on foreign/non-state based outlets?

Take Stieg Larsson’s international bestseller, The Millennium Trilogy The Girl With the Dragon Tattoo, The Girl Who Played with Fire and The Girl who Kicked the Hornets’ Nest. Even on sale, they’re still $16 more expensive in store than from the UK, including delivery.

That is the dilemma for one of Australia’s biggest book sellers. Dymocks is considering moving its online business offshore because it says it cannot compete with cheap, online sales.

Dymocks chief executive Don Grover says overseas retailers have an unfair advantage because they do not pay GST.

“Dymocks has been in the business for 130 years, and we’re actually now having to make a decision about whether or not to move our online business offshore,” he told the ABC.”

It would actually make more sense for us to send books from an overseas location back into Australia and avoid the GST. To give a competitive advantage to overseas web sites of 10 per cent is just unsustainable.”

Don Grover says his company is already trimming its margins, and the success of cheap, international web sites is making it hard to compete.

via Book battle: Dymocks considers offshore option – ABC News Australian Broadcasting Corporation.