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The Stalingrad Moment

– A debt of gratitude to the readers who answered my request to upload the finale of the 1998 Fleche Wallonne, what we might call The Passion of Bo Hamburger. His truncated attempt to ‘rock the baby’ is even more charming than his Spinergy wheels or VDB’s hairnet. It would be nice if there was a way the Cozy Beehive could upload this to its canonical compilation of victory salutes.

A tip of the hat to two of the folks who uploaded Fleche clips, both of whom also happen to be fine bloggers: Cycling Inquisition and Helmeteering.

– The evolution of best practices for surfing the Internet never ends. Just as we’ve all learned to keep our Social Security Number under wraps and to not email credit card numbers, isn’t it time that we accept that the web is a full-fledged spoiler zone? It’s amazing that people still bitch about ‘spoilers’

– One race we’ve allegedly spoiled was Liege-Bastogne-Liege. Truly spoiled, of course, were Team Leopard’s hopes for a real result this spring. Their ham-handed attempts at damage control were painful to observe. Almost as painful is the fact that we don’t yet have Canyon bikes to sell to folks inspired by Philippe Gilbert’s dominance of the Ardennes on his Aeroad. But the day is coming. If you’re keen on a Canyon please let us know now since availability for 2011 will be tight.

– Golfers live in fear of lightning for good reason. Getting to ride in the rain is half the fun of training. But should cyclists have similar fears of getting zapped?

– My admiration for the fairer sex is a terrible weakness. Nevertheless, there’s something discomfiting about this Pearl Izumi ad from the most recent issue of ProCycling, no?

– Spring Classics season is over. The Grand Tours are imminent. A completely different breed of drama awaits. Not better. Just different —

– Speaking of Grand Tours, Rapha is opening one of its fantastic ‘Cycle Club’ retail pop-up stores in San Francisco next week just in time for the start of the Giro d’Italia. The location at the Marina puts it close to Cow Hollow, the neighborhood that was home to what was once the world’s greatest bike shop, the Clay Mankin-era City Cycle of the mid-90’s. I can’t help but think that Clay would’ve been overjoyed that cycling had reached the point that something as forward-thinking as the Rapha Cycle Club exists.

Forward-thinking in what ways? First, pop-up stores (that is, temporary retail stores that open for just a few months or even just a few days) aren’t immediate moneymakers. Rather, they are a ploy to sexify a brand for the long haul by creating a positive impression and by attracting new customers. Rapha’s long term approach to marketing dollars, particularly the level of marketing dollars it takes to create even the most threadbare pop up, is indication of beautiful madness or evidence that Rapha is lavishly capitalized. In either event, we envy their gumption.

There’s another issue looming over the Rapha Cycle Club. State governments are drowning in deficits and the most appealing well of unrealized tax revenue are online purchases by consumers. As it stands now, there is no sales tax on these purchases. Instead, consumers are responsible for paying a ‘use tax’. Of course, almost no one does that. States want to make e-commerce merchants their tax collectors.

california board of equalizationThere’s no doubt that e-commerce companies are facing their Stalingrad moment when it comes to sales tax. Soon enough, tax laws will require, and streamlined taxation procedures will permit, sales tax collection for online purchases. Currently, merchants must collect sales tax only in states where they have ‘nexus’.

Put simply, a company has a nexus if it has a business presence in a state. But defining a business presence is where things can get tricky. One thing is clear: any merchant that opens a retail store in any given state, opens itself up to full-fledged taxation on all purchases made in that state both in-store and online.

Here at Competitive Cyclist we do mammoth business in California and assume that Rapha’s customer base is identical. But our mortal fear of the California State Board of Equalization means that we’ve never done a pop-up anywhere in the state (retail storefront, Tour of California expo, or otherwise). The Board makes it clear that a merchant has nexus even if it only does business temporarily in California. Even worse it’s not clear whether a temporary presence triggers temporary nexus or if a temporary stay results in nexus that lasts the remainder of that year or longer.

By charging consumers sales tax for all purchases in California — both at the Cycle Store and for online purchases – Rapha has spiked its retail prices for buyers in the state by 10 percent. Accepting that is a gutsy move. And dealing with the gigantic administrative headache of filing monthly sales tax payments with the State of California (payments which must be broken down into city, county, and state segments) would be enough to terrify less ambitious ecommerce companies. Bon courage!