The Virginia Retail Merchants Association (VRMA), a business organization representing more than 5400 retailers and other associated businesses in Virginia, called fixing the Amazon sales tax loophole the number one priority for the retail business community in Virginia.
“Retailers in Virginia need a level playing field to compete in a free market economy,” said Ken Vaughan, Chairman of the VRMA Board and District Vice President of Peebles in South Hill, Virginia. “Closing the Amazon loophole is the single most important legislative priority for the 2012 Virginia General Assembly. 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, retail companies are required to collect and remit state sales and use taxes when they have a physical presence in the state. Amazon has avoided collecting and remitting sales taxes in a number of states, including Virginia, by implementing a complex corporate structure with subsidiary-like companies. With revenues from internet sales rising rapidly, states are quickly acting to close the Amazon loophole. Eight states have passed legislation in the past two years and governors in four states have reached agreements with Amazon to have them begin remitting in the future.
Mitch Daniels of Indiana became the latest governor to enter into a voluntary agreement with Amazon to begin collecting the sales tax no later than January 1, 2014 in exchange for Amazon not being responsible for potentially uncollected past sales taxes. Governor Daniels stated that the annual loss of revenue to Indiana from Amazon alone is between $20-25 million per year. Some analysts have suggested that Amazon’s tax structure may violate state tax collection laws. In 2010, the Texas Comptroller assessed Amazon $269 million in unpaid taxes, interest and penalties. The conservative Texas legislature passed legislation last year closing the Amazon loophole.
“Fixing this sales tax loophole will mean more Virginia jobs over the long-term. Numerous studies have shown that bricks and mortar retail stores employ significantly more people than internet retailers on a per revenue basis. Local retail stores also give back to their communities by volunteering with local organizations and making charitable contributions,” said Laurie Aldrich, President of the VRMA.
The Virginia Retail Merchants Association was established in 1905. VRMA is a not-for-profit trade association representing retailers to educate, inform, and serve as a resource. VRMA and its retail member associations represent more than 5,400 retailers and other associated businesses throughout the Commonwealth of Virginia.