Per an agreement, Amazon will begin collecting sales tax on purchases made by Virginia residents.
Online retail giant Amazon will begin collecting state sales taxes in Virginia, according to a release by Gov. Bob McDonnell, in what is seen as a victory for competing brick-and-mortar retailers in the state.
The agreement comes as legislators in the General Assembly consider the so-called "Tax Fairness Bill," which would require out-of-state online retailers with distribution facilities in the commonwealth to collect sales taxes on goods sold to residents of Virginia.
According to existing laws, Virginia residents have an obligation to self-report consumer use taxes on their tax return, but business advocates say this put retailers in the state at an unfair disadvantage, because they were required to collect the 5 percent sales tax at the point of sale.
Business groups had been calling for legislation on this since last year, when Amazon announced that it would build two new distribution centers in Richmond to complement the one already existing in Northern Virginia. Robert Shinn with the Virginia Alliance for Main Street Fairness said in a statement
"This bill helps to ensure that online retailers with a physical presence in Virginia are treated the same as traditional brick and mortar retailers who are already required to collect and remit existing sales taxes on goods sold in the Commonwealth," says McDonnell, in a statement.