Council may pass 'pawn tax' to cover fees incurred tracking stolen goods

With Tucson in a state of "emergency" over the sale of stolen goods, the City Council may enact fees Tuesday to cover the cost of investigating such transactions.

“It is necessary for the peace, health and safety of the City of Tucson that this Ordinance become immediately effective,” according an amendment to the city code  the council will take up at its meeting Tuesday at 5:30 p.m. at City Hall, 255 W. Alameda St.  

According to a version of the amendment released Monday afternoon, pawn shops and secondhand dealers that complete more than 1,000 transactions in a calendar year will be required to pay a $1,000 licensing tax per calendar year to the City of Tucson.

Additionally, a $1 fee will be added to all transaction reports. Reports are required for the resale of all jewelry, semiprecious stones, DVDs, and items with serial numbers, as well as all transactions over $100.

The new version of the amendment also removes scrap metal dealers from the list of secondhand dealers and sets an effective date of July 1, 2010, for transaction fees and July 1, 2011, for obtaining licenses.

Local secondhand stores have largely decried the plan, suggesting that their customers will turn to sales venues that do not require such fees.

Sean Feeney, executive vice-president of Bookmans, noted that the store's “primary objection is the notion of a per-transaction fee. We feel it creates an environment that places a disproportionate burden on second hand dealers, and an incentive to the police department to increase the number of tickets they require to process a transaction.”

“The bill will affect customers in two ways. It affects the amount we can pay them if we need to cover fees, potentially; it also creates added inconvenience for the customer. We feel that this negatively affects the shopping experience.”

“Right now, you have to fill out a ticket for certain goods. The number of things we're currently required to complete tickets for – like CDs and DVDs, for example – is greater in Tucson than in other markets we operate in, like Phoenix, Mesa and Flagstaff.”

But Tucson Police Chief Roberto Villaseñor suggested that the pawn industry was “throwing out a lot of smoke” to disguise the real issue at hand: they are frequent purveyors of stolen goods, and these taxes and fees are a way to help the police department recover the costs inherent in monitoring such transactions.

“We found one guy selling 115 chain saws. At the same pawn stores. And they never questioned him on [his supply]. One man sold 10,000 worth of dentures and bridges, and we end up finding he's stealing them from bodies in the mortuary. And [pawn stores and secondhand dealers] never report that as suspicious.”

“The bare facts of the issue are that we have a unit [TPD's Pawn Detail] dedicated to auditing and monitoring this industry because this industry has developed a reputation for buying stolen items. There is a cost for maintaining this unit that regulates this type of activity; we're just asking for some cost recovery.”

The department's cost to maintain the unit is roughly $699,000 per year; the code amendment would generate about half that in revenue.

Feeney also expressed concern that larger retailers, such as Best Buy and Radio Shack, who have recently begun engaging in resale of consumer electronics, such as iPods and cell phones, are not currently being tracked by the police department for their resale transactions.

“We've found that so far enforcement has centered on smaller, independently-owned stores. We need to be on a level playing field with all other secondhand dealers before we can really do enforcement.”

Villaseñor responded, “[TPD has] no verification of that actually occurring, but we are going to look into that, and if they are then yes, that would fall under the parameters of the law.”

Beyond concerns about solvency and enforcement lies a distinct philosophical divide.

Feeney maintains that “the Police Department justifies [the proposed tax] by saying, well, some people steal things and bring them to secondhand shops, and the industry has an obligation to defer the cost of these burglaries.

“We don't agree. It's like saying if you live in a neighborhood with higher crime, you should pay higher taxes, because the police have to spend more time and energy in your community.”

“I think that that's ridiculous,” said Villaseñor. “The people who live in a high crime neighborhood live there for a variety of reasons, and they don't invite the criminals to come into their neighborhood.”

“The pawn and secondhand businesses, by virtue of buying stolen property, invite people who want to get rid of stolen property, to possibly use them as a venue. So that's not an accurate comparison.”