The New York Times Company announced first-quarter 2022 diluted earnings per share from continuing operations of $.03 compared with $.24 in the same period of 2021. Adjusted diluted earnings per share from continuing operations (defined below) was $.19 in the first quarter of 2022 compared with $.26 in the first quarter of 2021. Operating profit decreased to $6.3 million in the first quarter of 2022 from $51.7 million in the same period of 2021 largely as a result of one-time costs related to the acquisition of The Athletic Media Company (“The Athletic”), which occurred in the first quarter of 2022, as well as a result of operating losses at The Athletic. Adjusted operating profit (defined below) decreased to $60.9 million from $68.1 million in the prior year, as a result of operating losses at The Athletic. Adjusted operating profit at The New York Times Group was largely unchanged at $67.7 million as digital subscription and advertising revenue growth was offset by higher costs.
The American Catalog Mailers Association (ACMA) and the catalog marketers and other remote merchants it represents are outraged that the Supreme Court today upended well-established precedent that has served the country well for more than half a century.
“Small catalog and online retailers with little or no presence beyond their headquarters will be hurt the most – some will be forced out of business,” said ACMA President & Executive Director Hamilton Davison. “Rural Americans, shut ins and older consumers will be particularly hard hit by this decision.”
By ruling against remote sellers and customers all across America, the High Court’s decision means companies who sell only 100 orders a year must now collect sales taxes for every South Dakota order. “This is a ridiculously small threshold,” Davison said. “A merchant might sell only 100 $20 orders and now be forced to comply with laws well outside its capacity and be subject to horrendous complexity.”
This opens the door to more than 12,000 separate taxing jurisdictions who are now free to impose virtually any requirement on businesses nationwide. Gone too are the protections from unreasonable and countless compliance burdens on companies without a physical presence; in fact there may be no end to what politicos attempt to impose on those who do not vote for them. “The dizzying array of differing state and local tax laws presents an impossible array of complexity for both remote sellers like catalog companies and their customers,” Davison added.
Congress must now work quickly to clarify exactly what burdens are acceptable to interstate commerce before things devolve into chaos unleashed by this decision. “Given the lack of restraint historically shown by regulators and tax administrators willing to impose virtually any burden on companies outside their borders,” Davison said, “the Court’s decision is sobering and troubling.”
Adding to the absurdity of the High Court’s decision, a recent Government Accounting Office report found that forcing all remote sellers to collect sales tax adds only 2%-3% new revenue but would impose significant additional costs to collect. In essence, it will take only a small drop to employment and corporate profitability to offset any new sales tax revenues this generates.