Retail Trade Group Makes Its Pitch for Sales Tax

New Ads Tell Shoppers to Hit the Stores and Stay Offline

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NEW YORK ( -- Sales tax: It's a good thing, even in a bad economy.

That's more or less the message in a new ad from the International Council of Shopping Centers, which is making a plea to consumers to stay offline and instead buy holiday gifts locally through a new campaign that includes a 60-second spot that will run nationally. The group hopes to educate consumers about the importance of sales taxes to their communities, saying that more than 33% of a municipalities' annual revenue is generated by sales taxes and those funds go toward schools and hospitals, as well as police and fire departments.

The spot is slated to run this Friday and Saturday on programs including "The Oprah Winfrey Show" and weekend editions of "Good Morning America" and the "Today Show." It will air on networks including CNN, Fox News, MSNBC and the Weather Channel among others.

Group's biggest consumer effort
Michael Kercheval, president-CEO of ICSC, said the campaign is the biggest consumer-targeted effort the group has ever embarked on. Typically, ICSC focuses on business-to-business communications.

Though the retail industry is certainly hurting as it braces for its slowest holiday season in years, Mr. Kercheval said that wasn't the sole impetus behind the campaign. Instead it was a conversation that took place three weeks ago with an ICSC member based in Scottsdale, Ariz. The member told Mr. Kercheval that sales-tax revenue in the community had plummeted 30%, forcing the city to lay off police officers and cut its 2009 municipal advertising budget.

"We came back and huddled and said this is a really important message. And we don't have much time to get this out," Mr. Kercheval said, noting funding for the campaign came out of the ICSC reserve fund. "Mayors have said this is so important, because people just don't understand it."

Shop Locally

A print component of the campaign.
The campaign, titled "Give Your Community a Lift ... Shop Locally for Your Gifts" also includes outdoor media and a public-relations outreach. So far, more than 10,000 posters and stickers have been distributed to retailers and shopping centers across the country. Mr. Kercheval said the message is resonating particularly well in hard-hit areas of the Midwest such as Ohio and Indiana.

The spot, which was created completely in-house, mimics a newscast segment and is titled "In The Know." It features interviews with Mr. Kercheval and Douglas Palmer, mayor of Trenton, N.J.

Targeting online retailers
The main target is online retailers. Mr. Kercheval said that many consumers don't understand that when they shop with online retailers that don't have a brick-and-mortar store in their state, their communities are losing out on sales taxes. Copy in the posters also takes a swipe at internet retailers. "[Local retailers] provide jobs and fund local charitable and civic organizations -- community values that internet retailers just can't match," the ad states.

Holiday sales for brick-and-mortar retailers are projected to be $470 billion, according to National Retail Federation. Holiday sales for online retailers are projected to be $44 billion, according to Forrester.

Beyond educating the public about the importance of sales taxes, ICSC hopes that in encouraging consumers to shop local, it will also protect retail jobs. So far this year the retail industry has lost half a million jobs, Mr. Kercheval said. "In these tough economic times, to the extent that we can create and keep jobs in our community, we should do that," he said. "We also hope it drives traffic. We hope people say 'Let's not log on tonight, let's go out tonight and shop.'"

That's not, of course, what online retailers want to hear. Patty Smith, a spokeswoman for Amazon, declined to comment on the validity of the ICSC's argument for shopping locally. But she did note that Amazon collects sales tax in states where it is legally required to, including New York, Kentucky, Kansas, Washington and North Dakota.

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