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Agreement reached on Tax Fairness Bill

Gov. Bob McDonnell announced today that an agreement has been reached among the governor’s office, several members of the General Assembly, Amazon and stakeholders, including brick and mortar retailers, on SB597, commonly referred to as the “Tax Fairness Bill.”

The House of Delegates Finance Committee approved amendments today authorizing the state to require an out-of-state seller, with distribution facilities or other related entities in the state, to collect sales taxes on the sale of goods to in-state purchasers, without regard to the location of the seller, on Sept. 1, 2013, or on or before Jan. 1, 2014 if federal legislation is enacted, to level the playing field for all sellers with a later effective date. 

Thus, this agreement negotiated with Amazon requires certain online retailers to collect the sales and use tax in the same manner as a bricks and mortar retailer.  The tax an online retailer will now begin to collect will relieve Virginians of their current obligation to self-report consumer use tax on their tax return. This new law simply requires collection of the existing tax at the point of sale.

“We were very happy to announce in December that Amazon would be opening two fulfillment centers in Virginia, investing a total of $135 million and creating more than 1,350 jobs. This is great news and we look forward to the growing partnership between Amazon and the state in the years ahead. At the same time, we also continue to work towards keeping Virginia the best place in America to do business. The amendments made today to SB597 will bring sound economic policy to Virginia and addresses the concerns of all interested parties,” McDonnell said in a statement.

Amazon’s Vice President of Global Policy, Paul Misener, said, “Amazon is very grateful to Gov. McDonnell for his focus on Virginia jobs and for his efforts to work with other governors toward national resolution of the sales tax issue this year.”

Sen. Frank Wagner (R-Virginia Beach), patron of SB597, stated, “As Black Friday and Cyber Monday have shown in recent years, the internet retail sector is a fully developed and thriving member of the community of retail merchants.  I’m glad to have sponsored this legislation that provides a level playing field for both brick and mortar retailers as well as those on the internet.  I’m also glad that all parties came to the table to help move forward this important legislation.”

Rob Shinn with the Virginia Alliance for Main Street Fairness representing a coalition of hundreds of Virginia retailers noted, “We are extremely pleased with the agreement.  Today’s announcement is a significant step toward tax fairness for the retail community by ensuring the same rules apply to all retailers doing business in Virginia.”

Amendment Language:

2. That the provisions of this act shall be effective on the sooner of September 1, 2013, or the effective date of federal legislation authorizing states to require a seller to collect taxes on sales of goods to in-state purchasers without regard to the location of the seller.  If however, that federal law is enacted prior to August 15, 2013, and the effective date of that legislation is on or prior to January 1, 2014, the provisions of this act shall be effective January 1, 2014.

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