Virginia Moves To Capture Sales Tax On Internet Purchases

By Meymo Lyons

A bill that would require global online shopping giants such as Amazon to start collecting and paying Virginia sales taxes won easy Senate passage.

The Senate voted 28-12 to advance to the House a bill intended to collect millions of dollars in lost revenue at a time when the state faces a $4 billion shortfall.

Sponsor Emmett Hanger argued that struggling owners of so-called "brick-and-mortar" stores are struggling and shouldn't have to compete with monied multinationals who ignore state taxes.

"They're being undercut by businesses that don't pay sales taxes, and that flaunt it," said Hanger, R-Augusta, noting that their Web sites entice customers to avoid the 5 percent tax.

While sales have been flat or worse for traditional retailers who have to pay the tax, Hanger said, multinational Internet sales behemoths have seen profits soar.

"And that is a significant amount of revenue that Virginia is losing and we should be getting part of that," he said.

Opponents, however, said the bill would have no effect on the major global online retailers it attempts to target. Instead, it would devastate small, Virginia-based online businesses who form alliances with the major companies, said Sen. Mark Herring, D-Loudoun, whose district includes the Dulles headquarters of AOL.