Virginia Retail Merchants Association response to McAuliffe State of the Commonwealth

Governor Terry McAuliffe presented his State of the Commonwealth Address to the elected members of the Virginia General Assembly.

In his speech, he proposed increasing the felony larceny threshold from $200 to $500 as one way to reform the criminal justice system in Virginia. The Governor stated that every single proposal he was making tonight is tied directly to building a new Virginia economy that creates opportunity for families from every walk of life and every corner of the Commonwealth. But what about the families of small businesses that are victims of shoplifting and organized retail crime or the large retail companies that have come to Virginia and provided thousands of jobs? It is no secret that two iconic retailers are closing a large number of stores in the United States. Anyone who thinks that retail crime doesn’t hurt businesses, jobs or an employee’s end of day earnings, is mistaken.

Virginia Retail Merchants Association opposes any increase of the Commonwealth’s threshold for felony larceny. The Governor points out that Virginia is fiftieth out of fifty for the lowest felony threshold in the nation. VRMA is proud of Virginia’s business-friendly threshold level. Our retailers that have locations in other states are the most vocal of our members of keeping the threshold low and tough on criminal activity. Organized retail crime in the United States has grown exponentially. To view a report on the shocking increase in Organized Retail Crime (ORC), click on this report prepared by the National Retail Federation: 2016 NRF Organized Retail Crime Report.

Governor McAuliffe talked about strengthening our economic development efforts so that every taxpayer dollar goes directly into creating new opportunity and economic activity. Like all Virginians, we are supportive of all economic development. However, we would most like to see the Governor focus on job creation with the existing businesses in Virginia. Rather than doing that he is hitting the retailers on two major issues this session. Issues that do make the difference on the ability to stay in business.

As we have stated before, Virginia Retail Merchants Association opposes any modified rollbacks of the accelerated sales tax threshold. From one year to the next Virginia retail establishments are asked to remit early sales tax payments creating a hole in the next year’s budget. Governor McAuliffe claims his proposal will produce $47.9 million in additional general fund revenue in June 2017, when in actuality he is creating a $47.9 million gap in July 2017 (the beginning of the new fiscal year). Virginia law enacted on July 1, 2016, establishes an accelerated sales tax threshold of $10 million or more in taxable sales, which would increase to a threshold of $25 million in 2018. The Governor has since announced his intention to take away the progress that was made for the retailers and rollback this threshold to $2.5 million in 2017 and $4 million in 2018. In 2015, the Governor promised business owners he would seek to cut the number of businesses subject to accelerated sales tax payments by 50%. He also stated the accelerated sales tax program is a lot of hocus-pocus.