The Virginian-Pilot
©
RICHMOND
As retailers from around the state lobbied lawmakers to end a sales tax loophole for online merchants, a state senator said one of the biggest beneficiaries, Amazon.com, is in talks with state officials about a tax deal.
Virginia retail industry groups have long argued that Amazon and other online merchants should be held to the same state tax rules as merchants with brick-and-mortar stores.
In 2010, they sought passage of a law to require Amazon to collect sales taxes on purchases it processed for affiliates in the state. The measure cleared the Senate but died in the House of Delegates.
State law specifies that dealers with a physical presence in the state must collect and turn over the state's 5 percent tax on their sales.
Yet despite having a warehouse in Sterling and a data center at an undisclosed location, Amazon has been exempt from paying sales tax on purchases made in the state because of a 2007 state Tax Department ruling.
On Tuesday, the Senate Finance Committee unanimously endorsed a bill, SB597, to require Internet companies with physical locations in Virginia to collect state sales tax. The bill from Sen. Frank Wagner, R-Virginia Beach, now heads to the Senate floor for consideration.
Without it, Wagner said traditional merchants are at a competitive disadvantage to online competitors.
By one estimate, Virginia could collect an additional $24 million in state and local taxes under Wagner's proposal.
Storefront retailers who support Wagner's legislation say they aren't asking for special treatment, just a level playing field to compete.
"Just make it fair for all retailers, brick and mortar, Internet," Joe Taylor, president of Taylor's Do It Center, a Hampton Roads hardware store chain, said after the hearing.
No one from Amazon spoke against the bill at the hearing.
Merchants' frustration over what they consider an Amazon tax loophole intensified in December when Gov. Bob McDonnell announced the company would bring 1,350 jobs and two distribution centers to the state.
As part of that deal, Virginia pledged more than $4.3 million in financial aid and other incentives but didn't require the company to collect taxes.
McDonnell has said the recent Amazon deal was about economic development, calling the sales tax issue a discussion for another time. Wagner said Tuesday that the administration and Amazon are in talks about a tax arrangement.
Asked about such discussions, a spokeswoman for the governor said only that officials have "met with all parties involved" and are monitoring legislative developments.
Amazon already has agreements with four states to collect taxes and others have pursued payments from the online retail giant, according to the Alliance for Main Street Fairness, a coalition of Virginia retailers.
Julian Walker, 804-697-1564, julian.walker@pilotonline.com
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First Amazon, Next All Internet Purchases
The camel's nose is now under the tent, this is a penalty in the form of a tax. No state has the right to tax items purchased from another state, otherwise, there'd be checkpoints at the borders to declare souvenirs purchased on vacation. This is a penalty against citizens who choose to exercise their right of free choice by using the convenience of the internet to search globally for the best price - it is impossible to "lose" state tax revenue on something not sold within the state. The concept is flawed, and the driving force is greed. If I drive to NC to purchase furniture, which state applies sales tax? Answer - NC, not VA. I'm 5th generation Virginian, recent Federal retiree, and have made the tough decision to leave my home. This is not
grabbing at straws
The 24 million that the state would collect would come from Va. citizens. The same citizens that the state has been been reducing services to for the last few years and asking to pay for more and more. Our current fiscal mess wasn't created by citizens yet we are burdened with its cleanup. I wonder if Representative Wagner voluntarily reports all his current Internet purchases and sends the money to the state each year? If Amazon is forced to charge sales tax, I'll just take my business elsewhere as will many others I'm sure.
Tax
No doubt, it is coming. Just a matter of time as I have always known. The greed of rich politicians will prevail. When Amazon is taxed, all I can do is fall in line with the rest of us zombies. Tax, tax, tax. Why not issue all of numbers needed to buy anything world wide and then make us pay taxes when we travel out of state too. Like for gas, food, lodging, etc. What is the difference. We are just the 99%. Tax us to death.
Brick & mortar stores can never be compared to Internet commerce ones. Two different worlds. Only money hungry politicians would present the farce and pull down the Internet stores. What is wrong with having an advantage? Make that against the law, please and control more of our lives. Oh, what is the use to complain?
I went to Wal-Mart at 7:30AM
I went to Wal-Mart at 7:30AM the past two Sundays to beat the crowd, avoid long lines and hopefully save a few bucks. Everything went fine until I was ready to check out. Wal-Mart had one line open for shoppers with over 20 items and three lines open for shoppers with 20 items or less. Why in the world would I not order online and avoid the stupidity of local retailers? Long lines, poor customer service, surrounding areas not maintained, limited items in stock, huge markups, inadequate hours or operation, dirty restrooms, restricted parking, pricing mistakes, the list could go on. I ordered 99% of my Christmas presents online at my convenience while saving money. I’ll shop local when the benefits exceed online.
AMAZON TAXES
I will take my shopping elsewhere if Amazon is forced to collect taxes. Additionally, I strongly urge for Amazon if this passes to walk away from physical facilities in Virginia. Do we not pay enough? New tolls are going to cost me $1200/yr to drive to work. My pay has been frozen so I now will have less money to spend on food, entertainment, etc. I guess the retailers that contribute to our delegates mean more to them then the little people. Shame on you.
Time to Protect Virginia's Businesses
Kudos to Sen. Wagner (R-Va Beach)for moving to require internet companies, with a Va. presence, but based outside Virginia to collect and forward Virginia Sales Tax on business done in the Commonwealth. Currently, Virginia based companies find themselves at a net price disadvantage to companies not required to collect sales tax, and that makes no sense for Virginia business or Virginia State. I personally think the bill should include any company that markets in Virginia, including catalogs, sales personnel, telephone marketing, etc should be required to collact and forward Virginia sales tax on Virginia sales...This is a loop hole that should have been addressed years ago...
The Government just can't keep their paws to themselves
It's okay though - I will continue to order online from places that do not charge tax.
I pay enough in taxes, tolls, and fees for everything else, I simply won't order online if I have to pay a tax.
Cheers.
T.E.A.
TEA
ANL
XOR
EUE
DGA
HD
Y
Leave Amazon!
Amazon, if the bill passes, leave the state. The internet distribution centers don't have the same costs as brick and mortar and have a competitive advantage in not having to maintain storefronts. Okay, so what? If Brick and Mortar shops provided exceptional customer service, somewhat reasonable prices, and the ability to buy and have in possession right then and there - they have the competitive advantage over the internet companies. Sales tax or no sales tax - doesn't matter.
Taylors do it yourself center was one of the retailers
Complaining.
That surprises me because nobody goes to Amazon to purchase emergency plumbing supplies, or (usually anyway) plants.
What on earth do they think Amazon is competing with them for?
Amazon will be wise to keep their distribution centers just out of reach. Paying shipping and handling fees is equivalent in most cases, and those fees help provide jobs for mail distribution centers, and fuel stations.