More E-Fairness News: Virginia Closes Loophole, Kansas Holds Hearing

Printer-friendly versionPrinter-friendly version

On Wednesday, February 22, Virginia Gov. Bob McDonnell’s office announced that it had reached an agreement on sales tax fairness legislation with Amazon.com, several members of the General Assembly, and key retailers.

The governor’s announcement came soon after the House of Delegates Finance Committee approved amendments to SB 597 that would authorize the state to require an out-of-state seller with distribution facilities or other related entities in the state, to begin collecting sales taxes on the sale of goods to in-state purchasers on September 1, 2013 (or on or before January 1, 2014, if federal sales tax fairness legislation is enacted). 

 Amazon.com has operated two facilities — a fulfillment center and data center — in the commonwealth for many years, and in December 2011 the company announced plans to open two new fulfillment centers.

The agreement is a turnaround for Virginia, where, in 2010, the House of Delegates voted down an attempt to clarify existing sales tax laws that would have required Amazon to begin collecting sales tax.

It is estimated that Virginia will garner some $24 million in sales tax revenue annually under the agreement, as reported by WTKR.com.

The Virginia Alliance for Main Street Fairness hailed the deal, which will finally put a deadline to the sales tax advantage that Amazon.com has been enjoying for years, as a victory for Main Street retailers. “We are extremely pleased with both the agreement and today’s legislative success,” said Rob Shinn, spokesperson for the Alliance for Main Street Fairness (AMSF) in Virginia.  “All retail companies with a physical presence in Virginia should play by the same rules.  The legislation that passed today will accomplish that goal.”

Kansas Hears Testimony in Support of E-Fairness Legislation

On Tuesday, February 21, ABA Board member Sarah Bagby of Watermark Books & Café in Wichita, Kansas, testified before the Senate Committee on Assessment and Taxation in support of SB 371, sales tax fairness legislation. SB 371 would require remote retailers with a broad network of online affiliates in Kansas to collect and remit sales tax to the state. The bill passed the committee on Wednesday, February 22, and moved to the Senate floor for consideration.

Bagby told BTW that, overall, the hearing “went really well.” In her testimony, Bagby noted that she has been in business since 1977 and has been following the state’s existing sales tax laws, and continues to do so with the store’s online business.

“Every day I have customers come into my store, ask for my expertise, and then take the information and purchase the product online so they can ‘save’ in sales tax,” she told the committee. “This is not just happening to me but it is happening to business owners throughout the state of Kansas. I am like all other bricks-and-mortar small businesses in this state and community that contribute to our economic growth. Not only do we provide jobs for local residents but we also contribute to local community organizations, and collect sales tax according to the outdated laws that do not apply to on-line businesses.”

Amazon.com, which has warehouses in Kansas, currently collects and remits in the state.