Cabela's may bail out of Maine over catalog sales tax issue

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Cabela’s Inc. may scuttle plans for a retail store to anchor a big development in Scarborough, Maine,  unless it’s granted a waiver from charging sales tax on catalog purchases from that state. 

Cabela’s, which contends its retail business is separate from the catalog business, has asked for an advisory ruling from Maine Revenue Services.   

 In states where Cabela's has requested similar exemptions, all were granted, according to The Associated Press.

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Stuffed animals of all shapes and sizes can be found in the new Cabela's in Boise, Idaho. (AP)

Stuffed animals of all shapes and sizes can be found in the new Cabela's in Boise, Idaho. (AP)

There appears to be more opposition in Maine, though. Several companies, led by L.L. Bean of Freeport, say Cabela's is seeking an unfair advantage, and appears to be using its promise of jobs and revenue to force the state's hand.

“It is not about competition; bring the competition on,” said Rich Donaldson, spokesman for L.L. Bean, which sells outdoor gear through catalogs and retail stores. “It is about playing by the same rules.”

L.L. Bean says it has no objections to Cabela's coming to Maine. It simply opposes what it calls inconsistency in the tax laws.

When Bean's establishes retail stores outside of Maine, Donaldson said, the company does not try to avoid taxes in those states. ''It's a matter of fairness and principle,'' he said.

Cabela’s has 16 stores in 12 states.

Cabela’s retail spokesman James C. Powell said he didn’t know the total number of states where it has these catalog sales tax exceptions and he couldn’t comment on the Maine situation because it would be premature and speculative.

Just for the record, Cabela’s has never officialy announced they intend to build a store in Maine, he said.

As proposed, the 125,000-square-foot Cabela’s would anchor a $75 million project that includes office buildings, a 200-room hotel, restaurants and a bank.

Scarborough officials have opened their arms to Cabela’s as they seeking to jump-start development at the planned location on the Maine Turnpike.

Cabela’s is prepared to withdraw its plans for Scarborough if the state does not agree with its tax proposition.

“It is a deal-breaker for Cabela’s,” said Gene Beaudoin of New England Expedition LLC, which put together the proposal.     Cabela's receives about 165,000 catalog orders from Maine every year, for about $10 million, Beaudoin said.

Both sides have hired prominent Maine lobbyists and political consultants.

''Every other state in which they have built a store has looked at the facts and said how they operate is OK,'' said Ted O’Meara, campaign manager for U.S. Sen. Olympia Snowe, R-Maine.  He is working for the developer that’s seeking to bring Cabela’s to Scarborough.

Dennis Bailey, who managed anti-casino efforts in Maine, has spoken in opposition to the development.

Cabela’s representatives were in Augusta last week, according to Jack Cashman, commissioner of the state Department of Economic and Community Development.

“I am in favor of Cabela’s coming in, but not preferential treatment,” Cashman said.

Leaders of the Maine Chamber of Commerce, Maine Municipal Association and the state chapter of the National Federation of Independent Business signed an opposition letter to Gov. John Baldacci on Aug. 15, according to MaineToday.com. L.L. Bean staffers helped draft the letter, which urges the governor to oppose any special tax deals, the Web site reported.

George Smith, head of the state's largest sportsmen's group, the Sportsman's Alliance of Maine, has asked Baldacci to find a solution that satisfies both companies.

In materials provided to town officials, Cabela's has promised a huge economic impact. It projects 3 million visitors the first year, generating $55 million in sales at the store, with up to 35 percent coming from out-of-state shoppers.

The store would employ 180 full-time workers and 140 part-timers. The total project on 65 acres, including the hotel, restaurants and offices, could create about 800 jobs.

In Nebraska, customers pay sales tax for online or catalog purchases from Cabela’s, according to James C. Powell, retail spokesman for the company.

In fact Nebraska does not allow any waivers from the state law requiring companies that have a store or other “nexus,” a minimum level of activity in the state that requires them to collect the sales tax from Nebraska online and catalog customers, said Tom Norris, spokesperson for the Nebraska Department of Revenue.

The Associated Press and Journal Star reporters Nancy Hicks and Richard Piersol contributed to this report.