The Virginian-Pilot
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Sen. Frank Wagner, R-Virginia Beach, has sponsored legislation to address the so-called "Amazon loophole" in sales tax collection.
Internet retailing giant Amazon.com Inc. operates a distribution center in Sterling and announced last month that it would spend $135 million to build two warehouses outside Richmond. State law requires a dealer with a physical presence in the state to collect and remit the 5 percent sales tax on purchases made by Virginia residents, but Amazon has never done so.
Retail groups have complained that Amazon has an unfair advantage over brick-and-mortar retailers, which must add sales tax on customer purchases.
Wagner's bill, SB597 (full text), would clarify state law to specify that a dealer that "maintains a distribution center, warehouse, fulfillment center, office, or similar location within the commonwealth that facilitates the delivery of property sold by the dealer to its customers" would have to register to collect and remit sales tax.
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Fairness is needed
I agree with Senator Wagner. We need fairness. Why should one company get special treatment especially when it hurts every local retail store across this state. It is unfair to continue to give an unfair tax advantage at the expense of VA businesses. We need to close the loophole and support our local businesses.
Just Close the Loophole
By some of the comments it looks like Amazon's PR people are in drumming up some negative comments. This is a pretty simple issue. Virginia state law says that all companies with a physical presence in Virginia must collect and remit the sales tax. Amazon has one distribution center already, and soon will have two more. But they use a complex corporate structure to pretend that they don't have a presence. This gives them the perception of a 5% tax advantage over the vast majority of other retailers - both bricks & mortar and online - that collect the tax. Every free market conservative in Virginia should support this bill. This is a bill about fairness and creating a level playing field.
Itemization
If the state starts collecting tax on amazon purchases, they might collect less tax money than before if more people decide to itemize their sales tax instead of taking a fixed deduction. It would be easier to do that too, because you wouldn't have to save individual amazon receipts. In fact, it might lead to increased amazon shopping, and less local shopping. Bet they haven't thought of that!
AMAZON "LOOPHOLE" BILL
What a poorly-written article. Why didn't the author bother to get the opinion of legislators from the Richmond area and Northern Virginia? What are Senator Wagner's motives? What does Amazon's expansion do for the Commonwealth in terms of jobs? Is the proposed bill a good thing for the Commonwealth? Did the author bother going to www.vpap.org to check the Senator's contributions from 1996 - 2011? No contributions from Amazon - might be a story there! The absence of this information makes the piece nothing more than a get my name in the paper article for the Senator, vice quality investigative journalism. All I know from the article is that Senator Wagner is doing something during the General Assembly session that targets Amazon.
Where is the item?
When you order something from Amazon, you do not know what warehouse it ships from. The same item may be found in one of several warehouses. Amazon is good at shipping it to you from the closest place. If VA requires Sales Tax, then Amazon could easily just ship items to Virginia from it's California warehouse.
Virginia has one of the lowest sales taxes, although a couple states have no sales tax. If we make it too hard for Amazon to do business here, I wouldn't be surprised if they take their warehouse plans and jobs to Delaware (which has no sales tax). Personally, I'd rather have the jobs than the sales tax.
This is a tax increase for Virginia residents
If Amazon is required to collect sales taxes, that money comes not from Amazon's coffers but from all of us in Virginia that purchase items through Amazon. It's our money that Amazon would remit to the state. That means that because the state wants the jobs and the revenues that come from an Amazon presence in VA (like other taxes and revenue from their business purchases like office suppplies, vehicle maintenance, gas, food purchases by its employees, HVAC work etc), that all Virginia residents -- and only Virginia residents -- will now pay 5% plus more for their purchases. The delegate that is proposing this frames this as an attack on Amazon when in fact it is a tax increase for Virginia residents.
Stupid Laws
Virginia is the most money-hungry state in the country. If I buy a t-shirt in Florida, pay their humongous sales tax, Virgina expects me to report that purchase come tax time and pay an additional 5% sales tax on top of the Florida sales tax because I purchased that shirt to wear in Virgina. What idiot politician thought of that law, knowing full well that few people are going to report a purchase in another state? It used to be that Democrats were responsible for these stupid tax laws, but now the Republicans have become just as stupid. The purpose of government is to provide for the common defense, not tax its citizens into the poor house.
Kudos Frank!
Of course Amazon should be required to pay sales tax! Why should they get some special treatment? They are retailers, they sell goods just like any other retailer. It is only fair that they pay tax just like any other retailer. Frankly, brick-and-mortar shops employ more people and contribute more to the economy than Amazon. If anyone deserves a tax break it is them.
point of sale, not point of distribution.
Sales taxes are collected at the point of sale, not the point of distribution. If you purchased an item while in NC, but it had to be sent to you from a warehouse in VA, would you expect to pay VA's sales tax? Of course not! You would have paid NC's sales tax at the point of sale, the store in which you purchased the item. What's the difference in this case? A distribution center is not a point of sale. Unless Amazon is "selling" the item in VA, there is no logic in assessing a sales tax simply because the item is being shipped from Amazon's VA distribution center.
Not only that, but Amazon
Not only that, but Amazon should pay taxes to return the other subsidies the state is giving them.