Retailers make Amazon their top legislative target
- January 12, 2012
A retailers group wants the Virginia legislature to make Amazon.com Inc. collect state sales taxes,
The Virginia Retail Merchants Association (VRMA),a organization representing more than 5,400 retailers and related businesses, has
made “fixing the Amazon sales tax loophole” its highest priority in the General Assembly session that began yesterday.
Retailers across the state were angered by $4.3 million in state incentives being offered to the giant online retailer to build distribution centers in Chesterfield and Dinwiddie counties.
The company will invest $135 million and create 1,350 jobs, but Republican Gov. Bob McDonnell said it won’t be required to collect sales tax on purchases by Virginians.
“Retailers in Virginia need a level playing field to compete in a free market economy,” Ken Vaughan, the chairman of the VRMA Board, said in a statement. He is district vice president of Peebles department stores in South Hill. “Small companies like mine are struggling to compete against online retailers like Amazon that don’t play by the same rules as others with a physical presence in the state.”
Under Virginia law, retailers are required to collect and remit state sales and use taxes if they have a physical presence in the state.
Amazon, which already operates a warehouse and data center in Virginia, is not required to handle sales taxes because, according to a 2007 state Tax Department ruling, because its business units in the state don’t handle sales.
Virginia retailers, however, point to other states with Amazon facilities that have struck deals with the online retailer to collect sales taxes.
Under an arrangement with Tennessee’s Republican Gov. Bill Haslam, Amazon will begin collecting sales taxes from state customers in 2014.
Another Republican governor, Mitch Daniels of Indiana, has struck a similar deal, which also will take effect in 2014.