The Virginian-Pilot
©
RICHMOND
It appears that tax-free online consumer purchases from Amazon.com are an endangered species in Virginia.
Brick-and-mortar retailers have complained for years that the Seattle-based online giant has enjoyed an unfair competitive edge because it isn't required to collect Virginia's 5 percent general sales tax. The disparity amounts to a 5 percent discount for online shoppers, they say.
Legislation to close that loophole was approved by an overwhelming 17-2 vote Wednesday in the House Finance Committee and now advances to the House floor.
The measure (SB597) introduced by Sen. Frank Wagner, R-Virginia Beach, has already passed the Senate and has the blessing of Gov. Bob McDonnell.
The bill requires online retailers with a physical presence in the state to begin collecting sales tax on Sept. 1, 2013. The effective date could shift depending on the fate of similar federal legislation pending in Congress, but in no case could be later than Jan. 1, 2014.
The state expects to collect $23 million a year in new revenue from Amazon.com alone, Wagner said. The retailer has a warehouse and data center in Virginia, and McDonnell announced in December that the company plans to build two distribution centers in the state.
"This is not a tax increase," Wagner told the House panel. "It's a tax compliance measure."
He said representatives of Amazon.com, Virginia's brick-and-mortar retailers, and the governor's office were all involved in developing his legislation and all are comfortable with it.
Joe Taylor, president of Taylor's Do It Centers, a local hardware store chain, and the legislative chairman of Retail Alliance, the Hampton Roads retail association, said the measure would ensure equal treatment for all retailers.
"It's important to have a fair playing field," he said.
Wagner said the only company he knows of besides Amazon.com that would be affected is Backcountry.com, an outdoor gear retailer. It is based in Utah.
Other out-of-state companies with distribution centers in Virginia, including Pennsylvania-based QVC Inc., already have been adding sales tax to purchases by Virginia customers.
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Pilot writer Carolyn Shapiro contributed to this report.
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Bill Sizemore, 804-697-1560, bill.sizemore@pilotonline.com
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Online Shopping is Here to Stay
So businesses are saying that when Amazon doesn't charge tax, it's like giving a 5% discount to the customer; but what they don't mention is that Amazon's prices are typically lower than their prices to begin with, so the customers are already getting a discount just by shopping with Amazon. They are just mad that people shop online instead of in their stores, and with the economy the way it is, I don't blame them. Businesses need to realize that in this day and age, technology is steering us away from a physical store and that's likely to remain the trend for a long time.
CHARGE Tax?
Neither Amazon nor any other business CHARGES Sales Tax. We are forced by the state to COLLECT it for the state.
No business wants to do it. It is a lot of extra paperwork. It is a real PITA.
Game Changer
Dear Amazon,
If you're reading this... I'm sorry to say, this is where you and me part ways. I'm not going to allow you to stab me in the back and twist the knife.
I encourage freedom loving Virginians to make all of their online purchases on websites with no physical presence in VA.
PS. Taylor's Do It Center: I hope you're happy lobbying for this. You've lost my business FOREVER. I'll drive further to shop at Lowe's and Home Depot - just to teach you a lesson in economics.
Sincerely,
Mr. Taxed-Enough-Already
Oh
Tell me again who that doofus in the picture is and why he is trying to take money out of your pocket?
The doofus is the ones breaking the law
All this law does is move the current tax collection mechanism from the post office to Amazon. The only people against this bill are the lawbreakers. It is currently a law in Virginia that if you buy something for use in Virginia you have to pay sales tax. If the retailer dosnt collect the tax you, by law, are required to pay the sales tax to the state. This bill just puts Amazon in the role of a retailer in collecting the tax these complainers by breaking the law, havnt been paying.
This Is Correct. Look At Your Virginia Income Tax Return!
Virginia law requires you to include any untaxed out of state purchases on your State Income Tax Return. You must pay Sales Tax on those out of state purchases.
Virginia has reviewed the sales of North Carolina furniture sellers and then gone after the Virginia buyers who didn't pay the Sales Tax on their Income Tax Return.
Then again, I don't see why ANY out of state seller should be exempt from collecting Sales Tax. Yes, Amazon is on the hook because they have presence in the Commonwealth. But, why should B&H Photo in NYC not collect Sales Tax on sales which are delivered into Virginia?
Why should brick & mortar camera stores in Virginia have to collect the Sales Tax & B&H not?
YES, it allows people to break the law, but really, why?
please
someone please list the stores supporting this bill. or are you ashamed.
Shipping costs more than taxes
People still have to pay shipping, so I don't see Amazon's advantage, unless you're ordering enough to get free shipping.
Amazon Prime
FREE Two-Day Shipping on millions of items
No minimum order size
Unlimited instant streaming of thousands of movies and TV shows with Prime instant videos
A Kindle book to borrow for free each month from the Kindle Owners' Lending Library
Free First Month then $79 A Year.
Sorry for copy and paste but if Pilot can cheerlead for Light Rail, this is fair.
First, I disagree with a use
First, I disagree with a use tax. If I find and buy my stuff without taxes on it why should I be charged for using it? My father had this problem when he bought a car in IN but we lived in IL. IL wanted him to pay sales tax even though he paid it in IN so he was penalized twice. There is no "advantage" in online retailers not having to charge sales tax. You are charged shipping and handling so often it is more expensive than if you bought the same item at the same price locally and paid sales tax. What this is about is the government wanting more money to blow on lining their pockets instead of using it to build roads or benefit the majority. Lets leave Amazon alone. (and why ONLY Amazon?)