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Amazon Now Charging Sales Tax For Virginia Residents

Amazon purchases just got 5.3 percent more expensive for residents of Virginia.
Soumit Namdi: http://www.flickr.com/photos/soumit/2734471/
Amazon purchases just got 5.3 percent more expensive for residents of Virginia.

Frequent online shoppers might may be in for an unexpected surprise the next time they hit checkout — Amazon will now be collecting state sales tax for residents of the Commonwealth of Virginia.

Amazon agreed to collect state sales tax effective Sept. 1 as part of the "Tax Fairness Bill," legislation intended to level the playing field between online retailers and brick-and-mortar stores.

Prior to the Tax Fairness Bill, Virginia residents were required to self-report consumer use taxes on their tax returns. Advocates of the bill argued that this put brick-and-mortar stores at a disadvantage, because they were required to collect the 5.3 percent sales tax at the point of sale.

The new rule doesn't apply only to Amazon — any out-of-state online retailer with distribution facilities in Virginia are now required to collect sales tax. Amazon opened two new distribution facilities in Chesterfield County and Dinwiddie County last year.

It's unclear what effect, if any, the addition of sales tax to online purchases will have on the shopping habits of Virginia residents. But according to fiscal impact statement estimates, the state could collect an additional $24 million in previously uncollected revenue, further bolstering the state's $585 million budget surplus.

While Virginians started feeling the effects Sunday, similar legislation on the national level is still winding its way through Congress. The Senate approved the "Marketplace Fairness Act" last year, which would require Internet retailers with sales exceeding $1 million per year to collect sales tax for all states.

The legislation is currently being considered by the House Judiciary Committee.

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