The Virginian-Pilot
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RICHMOND
Keep your hands off our portion of the tax dollars.
That’s the message merchants from Hampton Roads and Richmond delivered to legislators today at a Capitol Square rally.
The merchants want lawmakers to reject Gov. Timothy M. Kaine’s proposal to take back into state coffers a small portion of sales tax dollars that businesses have been allowed to keep for decades.
Kaine has targeted that money, about $64 million, as part of his plan to balance a state budget with a projected $2.9 billion revenue shortfall.
“It’s another nail in the coffin to retailers,” said Fred Schoenfeld, proprietor of the Commodore Theatre in Portsmouth.
Schoenfeld said that in a tight economy, the $600 or so he’s allowed to keep annually could determine whether he hired another teenager to work at his theatre.
When Virginia adopted a sales tax in 1966, the so-called dealer discount was part of that legislation.
At the time, it was considered a convenience fee for merchants saddled with collecting the new levy.
Now that computer technology has eased business accounting, the governor believes the fee is less justified.
Even though the slice of tax many merchants keep is small - just pennies on the dollar - business owners claim that modest amount is more important for their bottom line than to the state’s ledger.
“The amount is not that much, but every little bit during this economic time means a lot,” said Tim Hillegass, president of an electrical supplies and lighting business in Chesapeake that employs seven people.
The dealer discount applies to the first three percent of Virginia’s 5-cents-on-the-dollar sales tax.
About 143,000 businesses get the discount, which averages $449 annually. Most merchants get less than that, with large retailers retaining the bulk of the money.
The Virginia Retail Federation argues that instead of repealing the dealer discount, Virginia could make up lost revenue by taxing internet-based retailers like Amazon.com which do business in the state.
Dealer discounts for eight taxes would be repealed if either of two bills in the General Assembly are passed.
Staff writers Warren Fiske and Dave Forster contributed to this article
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Employees generate revenue
At $6 an hour, that would be less than two hours a week IF there were no payroll taxes to consider
That would be true if the employee didn't generate revenue. If that was the case there would be not point hiring him in the first place. The extra money on the bottom line that enables expansion is far less than the operating cost increase after expansion. Obviously there's a larger chance of losing money if the expansion does not bring in more money, but that's what business risk and growth is all about.
I bet most people didn't know this...
...I didn't. As much as I feel for the retailers wanting to keep every last cent they can in this economy, this is a tax afterall and should go to the state.
sales tax
I run a small repair business and have to collect the sales tax for parts and its a pain for the small amount I get to keep for doing all the paper work. I will be glad to pay the state the amount I get to keep if they collect their own taxes. I can provide the names and address of my merchants and they can collect from them. Leave me out of the process is fine with me or pay my hourly rate for the time it takes to figure the taxes I keep and the amount the state get to keep. I got to keep 2.19 for collecting 73.12 this month, by the time I buy a stamp, ennvelope and go to the post office, how much do I have left. Any one want a job like this? Thanks Gov. for what?
$600 annually to hire a teenager?
At $6 an hour, that would be less than two hours a week IF there were no payroll taxes to consider.
Just how much/how little do these teenagers earn at the movie theater?
Example
The story was very vague on the amounts involved, so here's an example. If you had $50,000 in taxable sales, you would have collect $2,500 in sales taxes, and you get to keep about $12.50 for your work in collecting and remitting the tax.
What it really costs you is hard to say. Generally speaking the smaller the business the more the it costs in labor per dollar collected.
The Whole Story
Again, VP, tell us the whole story. How much exactly is the discount? the article said "The dealer discount applies to the first three percent of Virginia’s 5-cents-on-the-dollar sales tax". Is it 1 percent of the first 3 percent, or 50 percent of the first 3 percent?
I'm sure the vendors will pass this along to the people, so it would be nice to know the exact amount.