Cause and effect

These headlines have fun in recent days:

Sport Chalet closing all stores

The California-based retailer is also stopping all online sales

and

Sports Authority closing all stores, liquidating

The sprawling chain has abandoned efforts to reorganize

The burning question is why.  Increased competition is part of it.  Dick's Sporting Goods has positioned itself as the go to big-box sporting goods store.  REI has its niche, obtained by focusing on the relationship with the customer.  Big 5 has honed in on specific product groups and lines and lower pricing.  Still not the entire story.  WalMart and Target, along with other discount retailers have increased their sporting goods lines.  Some retailers of apparel have added more athletic attires to their stores.  Then there's the online competition.  

Phil Lempert is a Santa Monica-based analyst of marketing trends and he told The Daily Breeze that brick and mortar retailers are being victimized by what he called "showrooming."  That is where "...customers will walk into a store, take a look at electronics, try on a shirt or jacket they like and then order it online."    One shopper the Breeze talked to mentioned using eBay to save on shipping costs and sales tax.

Makes sense except for one thing.  Shoppers like the aforementioned Corey Hamilton aren't avoiding the sales tax.  They are evading it.  The difference is what is and isn't legal.  Tax avoidance, where one follows the law to pay the lowest possible amount of tax is legal.  Tax evasion is where someone ignores the law to avoid paying tax they legally owe.  California is one of the 45 states that have a sales/use tax.  In CA, if you buy from an out of state retailer, or an online retailer and that seller does not collect sales tax, then you owe use tax.  You can file a use tax return with the State Board of Equalization, or simply calculate your annual use tax bill and pay it on your state income tax return.

Most people are either unaware of the use tax law, or just ignore it entirely.  This gives online retailers an unfair advantage over brick and mortar stores.

That's a big reason why two sporting goods retailers are closing their doors forever.  They won't be the last ones forced to close.  Just part of a trend.