The Virginian-Pilot
©
RICHMOND
With little discussion, the Virginia Senate today overwhelmingly approved legislation to close a tax loophole that enables online retailers such as Amazon.com to avoid collecting state sales taxes.
Senate passage of Sen. Frank Wagner’s SB 597 (full text) – a priority for Virginia retail groups seeking tax parity with online competitors – comes as talks occur between the state and Amazon on a possible tax deal.
The bill from Wagner, R-Virginia Beach, which passed on a 34-6 vote, would create a legal presumption that online merchants with a physical presence in Virginia collect the 5 percent sales tax and forward it to the state.
Although Amazon has a warehouse in Sterling and a data center at an undisclosed location, it has been exempt from paying sales tax on purchases made in the state because of a 2007 state Tax Department ruling.
The company’s Virginia footprint will grow as part of a deal announced in December by Gov. Bob McDonnell to bring 1,350 jobs and two Amazon distribution centers to the state.
Amazon is expected to receive $4.3 million in state financial aid and other incentives as part of the deal, which doesn’t require the company to collect taxes.
That might change as a result of ongoing tax talks Wagner said are being held between state and Amazon officials. The company has agreed to tax deals in other states where it has a presence.
Noting Amazon has offered to collect taxes as of January 2014 in some states, a local retailer who considers the current tax policy unfair said Virginia merchants can't wait that long.
“Every day this loophole continues means that Virginia retailers will lose sales and jobs just because one company is playing under a different set of rules," said Joe Taylor, president of Taylor’s Do It Centers, a Hampton Roads hardware chain. "This loophole needs to be closed in 2012, not 2014."
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A tax increase by any other name ...
Kudos to Senator Frank Wagner. It looks like he and fellow Republicans in Richmond have found a way around their "no new taxes" pledge. By wrapping it in "a desire to help local retailers" he and fellow senators have found a clever way to raise $24 million in new revenue for the state.
Who are the local retailers, by the way, who will benefit most? Walmart, Home Depot, Target, Costco, and Best Buy of course! These "struggling" retailers want a "level playing field" just like the one they gave mom and pop retailers a decade ago.
It will be interesting to see whether House members and the Governor will stick to their principles - or sell out to Big Box retailers for a cool $24 million.
"CRUCIFY HIM!!!"
Let's all vote Mr. Wagner right out of office. He surely is not serving our interests.
Great PR there Taylor’s
"This loophole needs to be closed in 2012, not 2014."
Taylor’s Do It Centers need to close in 2012 not 2014. I’ve gone in there for the last time. And with high prices and poor selection, I don’t think I’ll miss them.
And Frank Wagner’s constituents need to let him know they won’t miss him either after this sneaky tax increase.
read your va tax return before you sign it this year rick
You are already required BY LAW to pay sales taxes on your internet purchases. It currently is an "honor system" where you are required to disclose your purchases on your tax return and pay up your 5% at tax time. If you are not currently doing this, YOU are a tax evader. Wagner is not raising taxes; he is just changing the "honor system" which apparently from all the negative posts here lots of people are cheating and not doing their legal duty under the current tax law and voluntarily disclosing and paying what they owe. The rule to make online sales taxable was passed long ago, it has just been an honor system until now.
Obscene
The rationale for the traditional sales tax was that retailers received some putative benefit from the state in which they're located. The rationale for taxes on Internet purchases is simply that the god of government wants more money. The politicians know that their tenure in office would be jeopardized if they directly raised the citizens taxes so they pull this indirect increase and force the businesses who receive no benefit from their state to collect their tribute. Since the state can use the force of law to steal money in this manner without receiving the blame for the increased taxes they do it. The citizens can be made to pay and the busnesses forced to incur the costs of accounting and collection for no benefit and bloated government grows
wrong
Retailers don't pay the sales tax, you and I do. It is not a tax on retailers, it is a tax on us, our purchases. That is why your $1 item at the Dollar Store costs $1.05. We pay the tax for the State to raise money based upon our purchases. Those who buy more pay more. It is not because the retailer is receiving some sort of benefit from their presence in the state. The retailers are just a collection agency passing our tax money on to the government. This is how all taxes should be, national sales tax on everything and dump the tax code. No more problem with illegals not paying taxes nor those working for cash under the table not paying taxes. You buy anything, you support the operations of the country through your sales tax dollars.
Of course, businesses don't pay taxes, customers do
but most people consider the sales taxes they routinely pay as a part of the price. There's still no rational basis for the government charging people for the privilege of spending their own money However, the business gets stuck with the costs of collecting and accounting for no services rendered.
No services rendered?
The services rendered are to the people of the Commonwealth. Civics lesson anyone? Besides, the online retailer is retailer is benefiting from the state providing and infrastructure to get the product to the customer--roads, police, etc. The online retailer is receiving services through the communications companies that work with the locality--those companies receive direct services. Returns to the online retailer are often handled by local pack and ship companies, US postal service, transportation companies, etc. And lets not forget an educated workforce to support all of this. Without the state and its people, the online retailer would not be doing business with you.
Final sentence
It's legal extortion pure and simple.
shame on you joe taylor
Joe Taylor should be ashamed for supporting this bill. I wonder how much money he contributes to the sponsors and supporters of this legislation.