■ 19 January 2012 | 8:48 PM
Va. Beach Sen. Wagner takes up Amazon tax bill
Virginia Beach Sen. Frank Wagner is championing the cause of bricks-and-mortar merchants large and small who want internet retail giant Amazon.com to collect state sales tax and forward it to the state as they do.
The Republican has filed a bill intended to prevent retail companies with a presence in Virginia from using their corporate structure to avoid sales tax responsibility.
“The legislation will create a more level playing field for Virginia retailers,” Wagner said. “Companies with a physical presence in the state should all play by the same rules.”
State law requires that dealers with a physical presence in the state must collect and turn over the state's 5 percent tax on their sales.
But while Amazon has two facilities in Virginia -- a warehouse and a data center -- it has been exempt from paying sales tax on purchases made in the state.
For years, Virginia retailers have argued that Amazon should be made to abide by the tax rules they're held to.
Legislation to make Amazon collect sales taxes on purchases it processed for affiliates has previously failed in the General Assembly, but the larger debate gained fresh momentum last month when Gov. Bob McDonnell announced the company would spend $135 million, bringing 1,350 jobs and two new distribution centers to suburban Richmond.
The company will receive more than $4.3 million in financial aid and other incentives from the state, even though it isn't expected to collect sales taxes and send them to the state.
Studies have suggested uncollected sales taxes from online retailers such as Amazon could cost the state hundreds of millions in revenue.
And retail interests who support Wagner's bill note that Amazon has entered into agreements with several other states to collect sales tax, while others have passed tax-collection laws aimed at the company.
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As a small brick and mortar retailer, I represent thousands of business owners in Virginia who are sick and tired of the government picking winners and losers. The Commonwealth has given Amazon millions of dollars in tax breaks while ignoring the competitive advantage one of the world's largest Internet retailers forces on small business every day. Collecting sales and use tax is a basic requirement to operate a retail business in Virginia and Amazon needs to play by the same rules.
This so called Amazon Loophole is a tax increase for you
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.