January 27, 2010

Staying on Top of the Hill

During the first full week of the 2010 session of the General Assembly the Virginia Retail Federation (VRF), the advocacy arm of the Retail Merchants Association and the Retail-Alliance of Hampton Roads, accomplished a number of objectives that will help shape how the retail industry will fare during this session.

The VRF, in its efforts to level the playing field between brick and mortar retailers and internet retailers, and to bring forward opportunities for additional revenues to the Commonwealth, asked Senator Emmett Hanger if he would patron legislation that would seek to close the “Amazon Loophole.”  This loophole is based on an opinion given in 2007 by the Department of Taxation that exempts Amazon and its affiliates from taxing internet sales for merchandise purchased by Virginians from Amazon and its affiliates located in Virginia. Currently when a consumer in Virginia makes a purchase from internet retailers and does not pay the Virginia sales tax on their purchase they are liable by state law to remit to the Commonwealth the tax on that purchase and all untaxed purchases they make on the internet. The remittance is done by the consumer on their state income tax return. This legislation moves the burden from the consumer to the retailer, where it currently exists for brick and mortar retailers. The VRF feels that leveling the playing field between brick and mortar stores and internet retailers is long overdue.  This legislation addresses only those affiliates operating in Virginia with annual sales of over $10,000.

Senator Charles Cogan is supporting the legislation by putting in a budget amendment with language to address this issue.  This is a bi-partisan effort that will need your support to make it through the Senate and the House.

Please click here to add your company’s name to the coalition to level the playing field between internet and brick and mortar retailers.

Dealer Discount

VRF opposes any effort to reduce the partial reimbursement to merchants collecting the state sales tax.

The VRF lobbyists met during the first week of the session with House and Senate leadership to discuss retaining the dealer discount eliminated by Governor Kaine and to express their opposition to the Accelerated Sales Tax payment placed in the budget by Governor Kaine. This is a double hit to the struggling retail industry, not only are we asked to give up the dealer discount (the amount the retailer retains for collecting and remitting the sales and use tax for the Commonwealth), but the industry would be required to remit an accelerated sales tax payment in June of 2011.

This past week the RMA sent a survey to all its retail members in order to gather information on what impact the loss of the dealer discount would have on each retailer. Retailers, if you have not completed the survey, please do so. If you did not receive the survey, you may contact Preston Perrin at pperrin@retailmerchants.com. The information will help develop options that could preserve the dealer discount.

Phoning or emailing your Delegate and Senator and expressing your support for retaining the dealer discount will strengthen the efforts of the VRF lobbyists. Click here to find your Delegate and Senator’s contact information.

http://conview.state.va.us/whosmy.nsf/main?openform

Felony Threshold

 VRF supports efforts to strengthen both prosecution of as well as the penalties attached to shoplifting and internal theft laws.

There are two bills introduced that would raise the felony threshold. Currently someone stealing under $200 is charged with petty larceny and someone who steals over $200 is charged with a felony. The Senate bill raises the felony threshold from $200 to $210 and the House bill would raise the threshold to $750.

The VRF opposed the Senate version which was heard in Senate Courts this past week and the bill failed on a 7 to 5 vote.   The House bill will be in committee in the coming week.

BPOL

(Business Professional Occupation License tax, based on gross receipts)

VRF supports the outright repeal of the BPOL tax.

This bill, introduced by Delegate Mark Cole, places caps on the present rates localities now charge for the BPOL Tax and prohibits any locality from imposing the BPOL Tax if the locality did not impose it as of January 1, 2010. 

The bill passed the House Finance Committee. The next step is the vote by the House Members. We believe there is a good chance of getting the bill through the House but it will be more difficult when the bill reaches the Senate Finance Committee.

The VRF testified before the House Finance Sub Committee in support of this legislation.  This legislation is one step to stopping the spread of this unfair tax. 

The VRF commissioned a study by CHMURA ECONOMICS & ANALYTICS on the Evaluation of Virginia’s BPOL Tax and Industry Profitability. The finding of the study will be presented to the House Finance Committee during the 2010 Session. This survey will support the efforts of Delegate Cole this year and future legislation that will look at alternatives to this tax.

Post Labor Day School Opening Legislation

VRF opposes any changes to the Post Labor Day School statute.

There were numerous bills that would have changed the Post Labor Day school opening statute.  The existing statute prohibits schools from opening prior to labor day unless they receive a waiver.  The VRF opposed the changes due to the impact changes would have on the hospitality industry. All House bills that would cause schools to open prior to Labor Day failed in  subcommittee. There are two Senate bills that address this issue which will be heard in the upcoming weeks.

Cigarette Tax

VRF opposes industry specific sales taxes.

This legislation would remove the referendum requirement and enable all counties to tax cigarettes an additional 5 cents per pack. The bill failed in Subcommittee. The identical bill has been introduced in the Senate and will likely pass.

Meals Tax

VRF opposes industry specific sales taxes.

This legislation introduced by Senator Fred Quayle would give all counties the authority, without going to local referendum as currently required by state code, to adopt a meal tax. The legislation also removed the 4 cent cap on meal tax for those counties that currently have a meals tax.

The VRF’s legislative policy opposes industry specific taxes.  The restaurant industry has been hurt during the economic downturn and to authorize counties to tax meals could give consumers a disincentive to eat out. 

The legislation passed the Senate Finance Committee. The VRF will oppose this legislation when it reaches the House after crossover. Delegate Harvey Morgan has the identical legislation in the House. The House bill will be heard in the next couple of weeks.

Buy Local License Plate

Retail Alliance is working with Virginia’s General Assembly this session to create a “Buy Local” Virginia license plate.  The cost is just $25, but the impact could be significantly more.  Much like our “Think. Shop. Buy. Local” initiative, both campaigns hope to move consumers to “Buy Local.”  Another way to support these initiatives is to purchase a “Buy Local” specialty license plate that the Retail Alliance is sponsoring.

Click here for a list of all bills being followed by the Virginia Retail Federation.

RMA Links

• Government Relations
• RMA Legislative Policy

The Retail Advocate is published the second week each month and whenever important issues affecting RMA members arise. Your comments and suggestions are welcome.

Contact:
George Peyton
(804) 662-5500
Fax: (804) 662-5507
e-mail

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