Amazon Coming to VA Amid Tax Revenue Questions

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The Virginia Retail Federation says that they welcome the announcement that Amazon.com plans to come to Virginia.  The VRF also applauded Governor McDonnell on his initiative to generate new revenue. The VRF says that they welcome the added employment and understands the significant impact to the state economy.  The VRF maintains, however, that retailers including Amazon should be taxed consistently.

Amazon has been under increasing criticism from state and federal officials for not collecting and paying state sales taxes.  Several states have passed legislation requiring them to collect and pay sales taxes and Congress is considering several bills dealing with this issue.

“All we want is a level playing field in Virginia,” said Nancy Thomas, President/CEO of Retail Merchants Association.  “Amazon currently does not collect and pay sales taxes in Virginia which leaves existing retailers in Virginia at a competitive disadvantage.”

All internet-based sales are subject to the same 5% Virginia sales tax.  If an online-retailer does not collect and remit the tax, it is up to the customer to pay on their state income taxes at the end of each year.  Because most Virginia residents do not know about this obligation, this means that Amazon’s products appear to be 5% less expensive.

Amazon collects and pays state sales taxes in five states in which they acknowledge having a physical presence and recently agreed to start collecting taxes in California in September 2012.  They also agreed to start collecting taxes in Tennessee and South Carolina in the future in exchange for new distribution centers being put in those states.

“The Virginia Retail Federation assumes that Amazon has agreed to collect state sales tax in Virginia now that they will unquestionably have a physical presence in the state,” said Ray Mattes, President/CEO of Retail Alliance of Hampton Roads.