Legislation to eliminate a tax loophole that allows online businesses to not collect state sales taxes sailed through the Virginia Senate today.
The so-called “Amazon loophole” bill — Senate Bill 597, sponsored by Sen. Frank W. Wagner, R-Virginia Beach — cleared the chamber on a 34-6 vote and now heads to the House of Delegates.
The legislation was lobbied extensively by groups representing Virginia retailers who said the loophole gives online businesses a competitive advantage. In effect, it would require Internet businesses with bricks and mortar facilities in Virginia to collect the state’s five percent sales tax on their transactions.
Amazon has a warehouse and data center in Virginia and plans to open two distribution centers in the state under a deal struck with the administration of Gov. Bob McDonnell that provides more than $4 million in state aid. The state and Amazon are still in negotiations.
Is the Senate undercutting Governor McDonnell’s efforts with Amazon? Do they not see this political move as increasing the taxes of Virginians?
