The Virginian-Pilot
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RICHMOND
A Virginia Senate panel clicked "send" on legislation that would require Internet retailers to collect sales tax on in-state transactions by affiliated online merchants.
The so-called "Amazon bill" from Sen. Emmett Hanger Jr., R-Augusta County, would clarify language in the state tax code to make it clear that certain online businesses cannot avoid paying Virginia's sales and use tax, as they currently do.
Several merchants told the Senate Finance Committee on Wednesday that large Internet retailers such as Amazon.com have a competitive advantage because they don't charge Virginia's
5 percent sales tax to online shoppers.
Closing the legal loophole, which costs Virginia millions annually in tax revenue, would "level the playing field for the many bricks- and- mortar businesses" that form the backbone of the state's economy, Sarah Pishko of Norfolk's Prince Books told the committee.
A fiscal analysis attached to Hanger's bill indicates that the change could net Virginia an estimated $17 million in revenue.
L obbyist Myles Louria claimed that Virginia wouldn't realize those benefits because large online outfits would end their relationship with state-based affiliate vendors rather than pay the tax. That happened in North Carolina and Rhode Island, he said.
Sen. Chuck Colgan, D-Prince William County, has submitted a budget amendment that seeks to accomplish a similar goal.
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"Leveling the playing field"
It doesn't really do that because it Amazon, eBay, etc would still be way cheaper. Even if I have to pay online retailers a sales tax I'd still be getting the products for a third of what I'd pay at Prince Books for example.
So....
So if large online outfits, like Amazon, end their relationship with state-based affiliate vendors, how does that impact Virginia’s tax revenues from earnings now generated by companies that may go out of business or move their business to another state because of this law? How would their leaving or shutting down effect job losses in Virginia and the accompanying personal income taxes to the state that may be lost? How would this impact capital goods purchases by these companies form other Virginia business? In the future would some business be less likely to come to Virginia if this law is passed? And by what means would this law be enforced globally? Has anyone making the decisions on this law looked into ANY of these questions?
Tax 101
Some of you posters here need some Tax 101.
First, collecting sales tax is not a new tax. Second, if you buy something from an out of state location and you don't pay sales tax to that location, you are legally liable to paying sales tax to the location in which it was received. Great example: I bought a dining room set in North Carolina. I had it shipped to Virginia which meant the North Carolina store did not collect taxes. However, Virginia found out because of proper reporting by the store and sent me a "friendly" letter stating I owed them sales tax. Third, if you pay sales tax to the location where you’re buying it, you won’t owe Virginia additional sales tax – it would be illegal and that’s not what this legislation would do. Finally, sales taxes collected in Virginia go to the general fund, so no sitting politician can earmark it for anything specific.
How some of you think this is a new tax or an increase in taxes escapes reasoning.
There is no debate here. It
There is no debate here. It is unconstitutional to charge one business with collecting a tax on services and not another. Aside from that, according to those against leveling the playing field we should do away with all retail locations as it is obviously far cheaper to rent a warehouse than a storefront.
Get real people. Many of you against the equal taxation are the same ones who take every chance you get to bash a person in office over jobs(or whatever).
We probably wont ever see
We probably wont ever see any changes or anything better from this money. I also think its funny how everyone has all of this knowledge but most people don't use it except for pointless comments up here
TAX, TAX, TAX ANYWHERE YOU CAN GET IT
Mr. Wizard I really like your style. I didn’t know Sarah was Bernard Pisko’s wife, but I did know he is our City Attorney and he really needs to go. He hands out a lot of really bad advice to the City. And here is a novel idea instead of raising taxes why not increase the number of tax payers.
Re: Gypsy
...here is a novel idea instead of raising taxes why not increase the number of tax payers.
You're absolutly right, Gypsy. And you know how we increase the number of tax payers? We make them pay sales taxes on items purchased from out of state online locations - as long as they didn't already pay a sales tax to that state.
Taxed on our Refunds
In case you didn'tknow, there is a little line on the Virginia Tax Return form (line 6 to be exact!) where we have to claim last year's refund on this year's form. So we are being taxed twiced on the same money. My point is I think the Commomwealth of Virginia gets enough money out of us already (IMHO).
Think about it
If you follow Virginia's philosophy on sales tax, if you were travelling, and stopped in Maryland and bought a toaster. Virginia's extending of their taxing authority into another state's jurisdiction would require you to pay them sales tax when you bring the item home to Virginia and put it in your house. How ridiculous is this.It's the same principal as an online purchase. The best they could do is to force a company that has any physical presence in Virginia to charge it's sales tax. How can Virginia force a company in California to charge sales tax for Virginia. They are not subject to Virginia state law unless they are in the state's boundaries. This type of thinking is why we are in such a financial mess.
Yes, Think About It
You really believe that, Lawrence?? This sales tax legislation doesn't propose that at all. Did you even read it? Nowhere does it say it would tax something you bought/brought from out-of-state if you already paid a sales tax to that state!