Remember those Scholastic Book Clubs from school, when you could use the money you saved up to buy your favorite books from a catalog?
Well, according to a Connecticut judge, the teachers who hand out the catalogs, help students make purchasing decisions and collect the orders are actually salespeople, even though they don’t receive any money. And if those teachers are salespeople, that means Scholastic Book Clubs Inc., based in Jefferson City, Mo. and with no physical presence in Connecticut, has to pay the state $3.2 million in sales tax, according to the ruling.
Here’s Connecticut Supreme Court Judge Peter Zarella’s explanation, via the Hartford Courant:
“… some 14,000 Connecticut classroom teachers acted as the company’s representatives soliciting, processing and delivering books sales to students. While not compensated for their services, teachers received book catalogs from the company…collected orders and payment from students…received shipment and distributed books to the students.”
It’s an interesting argument and one Scholastic, which hasn’t commented on the ruling publicly, appealed when it was originally made by the state’s Department of Revenue Services.