Virginia Senate Overwhelmingly Passes Sales Tax Fairness Bill

On Friday, February 10, the Virginia Senate passed a sales tax fairness bill by a margin of 34-6. The legislation, Senate Bill 597, sponsored by Sen. Frank Wagner (R-Virginia Beach), would require retailers with warehouses or distribution centers in Virginia, such as Amazon.com, to collect and remit sales tax for purchases made by Virginia residents. The proposed legislation clarifies state sales tax laws so that companies with a physical presence in the state, such as a warehouse or distribution center, cannot use complex corporate structures to avoid collecting and remitting state sales tax from customers.

“The legislation will create a more level playing field for Virginia retailers,” Wagner told the Washington Post [1]. “Companies with a physical presence in the state should all play by the same rules.”

SB 597 now moves to the Virginia House of Delegates for consideration. According to nvdaily.com [2], no industry group has come out against the bill as yet, and, so, the legislation “appears to have a rather unencumbered road to [Virginia] Gov. Bob McDonnell’s desk.”

Regardless, the American Booksellers Association is stressing that it is still crucial for its bookstore members in Virginia to contact their House representatives and urge them to support the bill. As the bill gets closer to passing, opposition to the proposed legislation is very likely to grow — so it is imperative that booksellers in Virginia make their support clear to their elected officials.

Amazon currently operates a facility in northern Virginia and will open two additional centers in central Virginia in the near future.  Amazon has entered into voluntary agreements with four states — California, South Carolina, Indiana, and Tennessee — to collect state sales tax as early as this September 1, the Virginia Alliance for Main Street Fairness [3] noted.  Pennsylvania is also requiring online retailers with a physical presence to collect and remit the sales tax by September 1 of this year. 

Other states, including Arizona and Texas, have assessed Amazon for delinquent taxes stemming from similar corporate structures. 

The Seattle-based company acknowledges physical presence in Washington State. Legislation is pending in several other states.