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The Retail Advocate

February 22, 2010

Staying on Top of the Hill:
Week 5, “Crossover”

Amazon Loophole Legislation

Senate Bill 660 has passed the Senate and is now been assigned to House Finance Subcommittee 1.  The bill will be heard in the coming days. There are three actions needed from RMA members:

  1. Attend the press conference on Tuesday, February 23 at 10:30 a.m. in Senate Room 2.  We will meet at RMA at 9:30 to board a bus that will deliver us to the General Assembly.  Please call Len East at 359-1709 or email len@retailmerchants.com if you can go with us or meet us there. We expect to return by 11:30.

  2. Contact by phone or email each member of the House Finance Subcommittee 1 (Cline (Chairman), Orrock, Cole, Gear, Marshall, R.G., Lohr, Greason, Johnson, Pollard, Englin, Abbott) and ask them to support SB 660.  Click here for talking points.

  3. Contact your retail colleagues next door or elsewhere in the Commonwealth and ask them to call their Delegate and all others on the above list to gain their support.

Dealer Discount Still Alive in the House Budget

The VRF will continue to lobby the Dealer Discount issue to achieve the highest level of allowance possible. 

The House and Senate released their respective budgets on Sunday afternoon.  Each budget contains an amendment to the Dealer Discount language in the original budget left behind by Governor Kaine.

The House Budget provides a reduced dealer discount for those retailers who are not required to report electronically. The proposed discount would be computed on the first 3% of the sales tax. Retailers with monthly taxable sales up to $62,000 would get a 2% dealer discount, $62,001-$208,000 in sales receive 1.5%  and retailers with monthly taxable sales of $208,001 and above receive 1% in dealer discount.

The Senate Budget suspended the dealer discount until October 1, 2010.  At that time the Tax Commissioner will deliver a report to the Governor with her finding of the cost to retailers in the collection, remitting and complying with the Sales and Use tax code.  The report will contain a recommendation to the appropriate dealer discount amount.

Both budgets do include an accelerated sales tax payment beginning June 2010 for those retailers with $1 million or more in annual sales.  Both budgets also include a clause that would phase out the accelerated payments beginning June of 2015 and complete phase out by June 2021.

There is tremendous negotiation before there is any consensus on the budgets between members of the House and Senate. After consensus is reached between the House and Senate the Governor will have his opportunity for amendments. 

Click here to view legislation that has passed its house of origin.

Click here to view bills that have failed.

Click here to view bills that have been carried over.

Amazon Loophole Talking Points

  • The bill is a Bipartisan Measure that Levels the Playing Field on the Collection of Sales and Use Taxes from Certain Internet Retailers

  • SB 660 closes a loophole that is allowing some internet retailers to avoid collecting the required state sales and use tax at the point of sale, the same requirement that is placed on other internet and traditional store retailers today.

  • Besides making the law consistent and fair for all merchants, the legislation would remove the onerous responsibility from the consumer to remember to pay the required sales tax on all internet purchases at the end of each year.

  • Most internet retailers are in compliance with state law, and this legislation is directed at those few who are benefiting from a small loophole that costs Virginia millions in lost revenue.
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