Virginia U.S. Senator Mark Warner (D) on Tuesday, signaled his support for a bill being debated in the Senate that would allow states to require businesses to collect local and state sales tax for purchases made online
The former businessman and Virginia governor said the bill "will help level the playing field between Virginia's homegrown, bricks-and-mortar retailers and the big online and catalog retailers," in a news release.
Specifically, the bill targets large internet retailers and other "remote sellers" that have sales of more than $1 million per year, i.e. the Amazon.com's and eBay's of the web world. If passed, those businesses would have to collect state and local taxes from the purchaser, based on where the buyer is located. That business would then have to send the sales tax money received.
Current Virginia law requires sales tax to be collected on internet purchases, however federal law only requires this when the business has a physical presence in the state where a purchase is made.
The bill has already received strong support from both Senate Democrats and Republicans. Governor Bob McDonnell projected money collected from the bill passing, in his transportation reform plan.
Quotes from Sen. Mark Warner on the Senate floor:
"Unfortunately right now, under the current circumstances, we have an uneven playing field. Local, bricks and mortar small businesses, follow the law and collect sales taxes from customers who make purchases in their stores. On the other hand, many large online businesses that may be located in some other state, do not collect the same sales taxes. I think on this floor already, we've heard repeated stories of some online retailers who even encourage people to go to the bricks and mortar store, look and price a product, and then go online and purchase that product. Not only does that discriminate against the bricks and mortar store, but from a public policy standpoint, if those sales taxes are not collected, creates an un-level playing field between the online vendor and the bricks and mortar store."
"This legislation will help level the playing field. It's about fairness. It's about having a level playing field for all types of retail outlets. And let me make clear, all it simply does, is require every business to collect and remit an already legal sales tax that has been put in place at state or local level. Because of this unequal playing field, because of current circumstances, because there has been a failure among many of our online vendors to collect these sales taxes, this creates a direct and immediate impact on state and local government. As a former governor, I can tell you that the inability of states and localities to gather uncollected revenues undermines dramatically their ability to invest in K-12 education, police and fire prevention, funding for roads and bridges, funding for public safety, environmental causes, you name it -- all of the basic core services that state and local governments perform, so many of them are directly funded in a major way by local or state sales taxes."
"Most recently, here in the Commonwealth, Virginia's leadership, with a Republican governor and a bipartisan legislature, finally enacted legislation to make significant investments in our outdated and overstressed transportation infrastructure. Any of the folks who work here on the Hill, or those of my colleagues who happen to live in Virginia, know traffic in Northern Virginia is at an almost debilitating level. We have finally in Virginia passed a funding source to try to address the transportation needs in Virginia. Part of the solution though, anticipates revenue from this legislation. So if we're going to be able to solve the transportation crisis that confronts not just Northern Virginia but all of Virginia, Virginia's got to have the ability to collect all of its sales tax revenue."
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