Retailers rally for online tax bill

Packed into Senate Room 2 were brick-and-mortar retailers wearing campaign style buttons with slogans like, “Stop Internet Tax Evasion;” absent was Amazon, or any other major target of the bill, which according to Nancy Thomas, president and CEO of the Retail Merchants Association, is precisely the reason for the bill’s necessity.

“Virginia retailers give back 45 cents of every dollar in taxes, and online retailers give back next to nothing,” said Thomas. “Online retailers get all the benefits of taxes, but don’t actually give anything back to the community.”

Cynthia Coldwell, co-owner of Kelley’s Gift shop in Richmond, said she spoke on behalf of all the retailers who “shoveled their sidewalks so customers could buy gifts for loved ones.”

The absence that upsets traditional retailers has been the protector of the online giants. Since 1992 an out-of-state retailer has not been required to collect sales tax on transactions made across state lines, provided the retailer has no physical connection to the state. Under the proposed bill Amazon will have to pay taxes on commissions owed to  Virginia-based affiliate websites.

Republican Senator Emmett Hanger, the bill’s author and primary political advocate, delivered opening and closing remarks for the press conference. In between, the podium served as a pep rally bullhorn for Virginia retailers who view the issue as a simple matter of fairness.

Susan Milhoan, president and CEO of the Retail Alliance, spoke about “leveling the playing field,” and attempted to quash rumors about new taxes.

“This bill is not in any way a tax increase, but rather a means of collecting a tax that already exists,” said Milhoan.

Currently Virginia residents are required to pay the sales tax for online purchases when they file their annual taxes, but most residents are either unaware of the procedure, or simply disregard it.

“We can’t ask citizens to keep a shoe box full of invoices around the house so they can pay their taxes,” said Hanger. “The system just doesn’t work as it is.”

Despite the enthusiastic tone of the assembled retailers, similar online sales tax bills in other states have failed to deliver on promised revenue. Amazon and Overstock simply end their relationships with affiliate advertisers in the state and head elsewhere, avoiding the sales tax, but still remaining a competitor.

“If they decide to leave and not respect fairness and integrity in business, then they’re not the types of businesses we want in Virginia anyway,” said Hanger.

Packed into Senate Room 2 were brick-and-mortar retailers wearing campaign style buttons with slogans like, “Stop Internet Tax Evasion;” absent was Amazon, or any other major target of the bill, which according to Nancy Thomas, president and CEO of the Retail Merchants Association, is precisely the reason for the bill’s necessity.

“Virginia retailers give back 45 cents of every dollar in taxes, and online retailers give back next to nothing,” said Thomas. “Online retailers get all the benefits of taxes, but don’t actually give anything back to the community.”

Cynthia Coldwell, co-owner of Kelley’s Gift shop in Richmond, said she spoke on behalf of all the retailers who “shoveled their sidewalks so customers could buy gifts for loved ones.”

The absence that upsets traditional retailers has been the protector of the online giants. Since 1992 an out-of-state retailer has not been required to collect sales tax on transactions made across state lines, provided the retailer has no physical connection to the state. Under the proposed bill Amazon will have to pay taxes on commissions owed to  Virginia-based affiliate websites.

Republican Senator Emmett Hanger, the bill’s author and primary political advocate, delivered opening and closing remarks for the press conference. In between, the podium served as a pep rally bullhorn for Virginia retailers who view the issue as a simple matter of fairness.

Susan Milhoan, president and CEO of the Retail Alliance, spoke about “leveling the playing field,” and attempted to quash rumors about new taxes.

“This bill is not in any way a tax increase, but rather a means of collecting a tax that already exists,” said Milhoan.

Currently Virginia residents are required to pay the sales tax for online purchases when they file their annual taxes, but most residents are either unaware of the procedure, or simply disregard it.

“We can’t ask citizens to keep a shoe box full of invoices around the house so they can pay their taxes,” said Hanger. “The system just doesn’t work as it is.”

Despite the enthusiastic tone of the assembled retailers, similar online sales tax bills in other states have failed to deliver on promised revenue. Amazon and Overstock simply end their relationships with affiliate advertisers in the state and head elsewhere, avoiding the sales tax, but still remaining a competitor.

“If they decide to leave and not respect fairness and integrity in business, then they’re not the types of businesses we want in Virginia anyway,” said Hanger.

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John Greco
John Greco
12 years ago

All SB660 is asking is for Internet Retailers to provide the same service that all other businesses are required to provide. That is collect and pay sales taxes.

More states are passing this type of legislation each year. Soon the Internet Retailers will have nowhere to hide. The internet retailers do have employees in Virginia that use the services sales taxes provide. They should want to provide this service for them.

You will find they already provide this service for big box stores that use their service. It will be a small change to include Virginia based retailers.

Ray
Ray
12 years ago

It’s a matter of simple fairness. Taxes, once we’ve approved of them through our legislators, should be fairly applied.I think it’s fair to ask retailers to collect taxes appropriate to the state where the buyer receives the goods, then remit accordingly.