The Virginia Retail Merchants Association says it will urge state legislators this year to require Amazon.com, which will receive $4.3 million in state incentives to build distribution centers in the state, to collect taxes on company sales.
The association said “fixing the Amazon sales tax loophole” will be its top priority in the General Assembly session that began yesterday, according to a report in Virginia Business.
“Retailers in Virginia need a level playing field to compete in a free market economy,” said Ken Vaughan, district vice president of Peebles department stores and the association’s chairman. “Small companies like mine are struggling to compete against online retailers like Amazon that don’t play by the same rules as others with a physical presence in the state.”
Virginia law requires retailers to collect and remit state sales and use taxes if they have a physical presence in the state. Amazon already operates a warehouse and data center in Virginia, but is not required to handle sales taxes because a 2007 state tax department ruling says the company’s business units in the state don’t handle sales.
Virginia retailers cite other states with Amazon facilities that have struck deals with the online retailer to collect sales taxes.
Amazon recently agreed to start collecting sales taxes in California in 2012 and last month agreed to expand its operations in Tennessee after pledging to start collecting sales taxes in 2014. Indiana also is scheduled to begin collecting taxes on Amazon sales in 2014.