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Bill Could Squelch Sales at Maine Bike Shops

Published April 11, 2011

AUGUSTA, Maine (BRAIN)—A bill recently introduced in Maine aims to impose a 2 percent surcharge on new bike sales. State lawmakers say proceeds from this new tax would go toward a Bikeway Construction Fund administered by the state DOT for the construction, improvement and maintenance of bikeways, but retailers and advocates say it will stifle sales at local bike shops.

“This bill would hurt small businesses—namely, Maine’s bike shops,” said Nancy Grant, executive director of the Bicycle Coalition of Maine. “Our state’s 57 bike shops already face stiff competition from bike sales on the Internet, where there is no sales tax. It’s especially difficult to run a bike shop in the southern part of the state because they have to compete with shops in New Hampshire, which has no sales tax. The 2 percent surtax will motivate more Mainers to buy their bicycles outside of Maine bike shops.”

The 2 percent surtax would be in addition to the existing 5 percent tax the state collects from the sales of goods.

Grant was set to testify today against the bill at a public hearing before the Maine Legislature’s Transportation Committee. The bill, LD 1189, was introduced by Rep. Ralph Sarty (R-Denmark) and referred to the Transportation Committee on March 22.

Cheryl Oliver, owner of Back Bay Bicycle in Portland, Maine, said if indeed the bill was passed, it wouldn’t add up to enough money to make a difference, but it would put a burden on families as it would make bicycles more expensive. A bike bought in the state retails for about $400, on average. With 5 percent sales tax, the cost goes up to $420. Two percent more will add another $8.

“I liken it to putting an additional tax on running shoes because those people spend more time on sidewalks,” Oliver said. “I don’t think it was mean-spirited. But the way I see it, as cyclists we’re not using our share of road money as it is. To be penalized for saving the roads and taking up less space doesn't make sense to me.”

Back Bay Bicycle has been selling bikes to Mainers since 1987.

According to the Bicycle Coalition’s Grant, about 10,000 bikes are sold in the state each year. “If the average price of a bike is $400, the total funds collected would be $80,000. That would hardly cover the engineering and design costs of a typical bike/pedestrian project, much less the construction. Subtract the cost of administering this tax, and there’s even less,” Grant said.

Jerry Porter, manager of the bike shop inside of Ski Rack Sports in Bangor, Maine, said the bill unfairly targets cyclists, while bikeways are typically used by runners, joggers with baby strollers and dog walkers, as well as others. “I don’t know why they’re targeting us,” he said. “We’re already paying taxes as it is.”

Porter said bike sales are a major part of business, particularly during the summer months. “Without bikes, we would not be Ski Rack Sports,” he said.

—Lynette Carpiet
lcarpiet@bicycleretailer.com

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