General Assembly budget keeps 'dealer discount' for retailers

Retailers will get to keep their "dealer discount."

The so-called discount is a portion of the state sales and gasoline taxes that retailers get back from the amount they collect from their sales. Gov. Timothy M. Kaine's budget proposal would have removed the discount to save the money for the state, but the General Assembly left it alone, to the relief of retail lobbyists.

The discount was created to compensate retailers for the time and expense of collecting and remitting the sales tax. The amount ranges from less than $100 a year for the smallest merchants to millions of dollars for the largest.

In exchange for leaving the discount untouched, legislators created a new tax payment schedule for the state's biggest retailers, those with sales of $12 million or more a year. The change aims to generate more tax revenue.

Starting in June 2010, those retailers would pay not only the tax they owe for the prior month but also an estimated tax for sales going forward two weeks. The following month, they would "true up" the actual amount of taxes they owed for the prior month and pay another projected amount for the next two weeks.

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com