The Cabela’s store and related development proposed for the Haigis Parkway is an incredibly exciting project for Maine and the Town of Scarborough. It will bring us hundreds of new quality jobs, with good employee benefits, and millions of dollars in new tax revenues. Cabelas’s will be the catalyst for drawing new businesses to the area, helping our existing local businesses grow, and creating new property tax revenue for the town of Scarborough.
As a state senator representing part of Scarborough and the chairwoman the Legislature’s Business, Research and Economic Development Committee, it is hard for me to understand the negative tone some have taken towards this project. Cabela’s is simply asking for a Maine Revenue Services ruling to apply existing Maine and federal tax law to their specific business model. It is a ruling the companies have obtained from numerous other states where they have built new stores or are planning to build new stores.
Cabela’s Catalog Inc. and Cabelas.com Inc., which are separate legal entities from the retail stores, already have 165,000 catalogue and Internet customers in Maine. They do not collect sales taxes on those sales because neither Cabela’s Catalog nor Cabelas.com have a physical presence in Maine, and, therefore, they are not required to collect tax under provisions of the U.S. Constitution. It is a clever business model, but by no means is Cabela’s asking for some kind of special exemption. Any company is free to configure their business model in this way.
In contrast, other Maine businesses have lobbied in the Legislature for special exceptions to be carved out in Maine tax law. These include an exemption from the business equipment tax that applies only to Maine-based, retail stores, with over 100,000 square feet of floor space that do over 30 percent of their business with customers located outside of the state of Maine. It is commonly known that this exemption applies to only one business in Maine: L.L. Bean.
Bean’s is a great company and a wonderful corporate citizen, but when I read in the Portland Press Herald that Bean’s staff admitted to helping draft a letter to the governor arguing against special tax treatment for Cabela’s, I had to question their motives
If the Cabela’s retail store is built, it obviously will collect Maine sales tax on every purchase at the store made by Maine residents and non-residents alike. Maine taxpayers will be the winner overall – to the tune of some $2.7 million sales tax revenue, in the first year of operation. The entire project will generate many millions more in new sales, food and lodging taxes just from non-residents.
So let me try to summarize all this. We have a chance to bring one of the most popular retailers in the world to Scarborough. This type of business is consistent with the widely accepted goal of promoting high-end ecotourism in Maine. The Cabela’s store will create a mixed-use development of retail, commercial, and office space that, when completed, will include 340,000 square feet and will cost approximately $74,000,000 to construct.
All of this can happen if the state of Maine concurs with similar rulings in other states where Cabela’s has stores. None of this will happen if the state of Maine takes a different approach. In fact, if no store is built in Maine, then the thousands of dedicated Maine Cabela’s customers will continue to shop in the catalogue and on-line or travel to New Hampshire, Massachusetts, and Connecticut, where other Cabela’s stores are planned. In short, their taxable dollars will get spent elsewhere.
It’s really quite simple. Does Maine want 5 percent sales tax on Cabela’s proposed substantial retail business in Maine or insist on 5 percent of nothing. Perhaps most importantly, what do we say to the unemployed worker or the hard working retail clerk at Walmart who might have a chance to move up to a better job at Cabela’s, where job benefits are known to be some of the best in the retail industry.
I think this is a pretty easy call.
Lynn Bromley represents the people of Senate District 7 and is the chairwoman of the Legislature’s Joint Standing Committee on Business, Research and Economic Development .
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