[LMB] Thor Power Tools, yet again

[hedwig]

May I please forward this to a friend (off list) who believes this?

Hedwig

D Echelbarger wrote:
> Ed Burkhead wrote:
> 
> 
>>The third topic we discussed, relevant here, was about
>>backlist books.
>>
>>The bookstore owner said that in the 1980s, Congress
>>changed the tax law making it no longer profitable to
>>keep backlist books.  He said that publishing companies
>>used to make big print runs of an author's books and keep
>>the extras in a warehouse, selling them slowly as orders
>>came in.  The tax law changed this.
>>
>>Now the publishers are punished for warehousing these
>>books so when sales drop off, the remaining books are
>>dumped, often at cheap prices, to get rid of them.  The
>>publishers are no longer offering slow-selling backlist
>>books.
> 
> 
> Ed, I'm sure the bookstore owner believed this to be true,
> but it's not.
> 
> This old post (which I keep around because this keeps coming
> up) explains it better than I could:
> 
> --
> 
> What Thor Power Tool held (and it was a US Supreme Court
> decision, BTW)  was that inventory may not be written off 
> for tax purposes until sold or discarded.
> 
> So apparently what happened is that a lot of publishers
> actually scrapped, and continue to scrap, remaindered books 
> that they kept in warehouses, already written off but still 
> available for sale.  If they have to actually dump them to 
> get the deduction, why bother to keep them?
> 
> Mitch Miller
> (still a tax lawyer) (sigh)
> 
> <snip>
> Thor Power Tool Againnnnnnnnn !
> 
> <snip>
> "THIS IS NOT TRUE. US publishers are *NOT* taxed on their 
> inventory. I know a great many editors have said this, but 
> they are *WRONG*. The people in their accounting departments 
> never bothered to explain clearly what had happened, and so 
> this is the impression the editors got, and they have
> spread it all over, and as a former accountant it drives me
> nuts."
> 
> Patricia C. Wrede
> 
> http://www.sfwa.org/bulletin/articles/thor.htm
> 
> --
> And yes, that's Pat Wrede as in the YA author. She's a good 
> friend of Lois's and used to post to the list occasionally, 
> back when Lois herself didn't.
> 
> Diane E