Lions and Tigers and (Loopholes), oh, my!
Gov. McDonnell endorsed SB 597, which would require online businesses with a brick-and-mortar presence to pay general sales tax, after the House of Delegates passed it on a 95-2 vote. Amazon will begin collecting the standard 5% sales tax next year. According to the bill's patron Sen. Frank Wagner, Virginia can expect to gain at least $23 million in tax dollars from Amazon in 2013 alone.
A press release from Virginia Retail Merchants Association stated, “State law requires that online retailers with a physical presence in the commonwealth collect sales tax on purchases from individuals with a Virginia address, but Amazon has been using a loophole to avoid those taxes.”
Thanks to a 2007 state Tax Department ruling, Amazon has evaded the law demanding that all retailers with buildings situated in Virginia pay sales tax. The Virginia retail industry lobbied for Amazon's tax compliance in 2010, but the bill, clearing the Senate, died in the House of Delegates.
Currently Amazon runs a warehouse in Sterling and a data center in an undisclosed location. The retailer also plans to build two distribution centers in Chesterfield and Dinwiddie counties at the end of this year.
The distribution centers, which would employ a total of 1,350 people, require a combined investment of $135 million.
In December 2011, Chesterfield's unemployment rate stood at 6.0%, while Dinwiddie's was 6.9%.
The bigger of the two, the eastern Chesterfield center will measure 1 million square feet and be located at Meadowville Technology Park. The Dinwiddie center will be located at Dinwiddie Commerce Park.
The Governor's Opportunity Fund will provide $3.5 million for the centers, while the Virginia Tobacco Indemnification and Community Revitalization Commission will contribute $850,000.
A release from the Governor's office quoted Gov. McDonnell for saying, “Amazon is known all over the world, and the new centers in Chesterfield and Dinwiddie counties will fulfill orders across the United States. The establishment of these new operations is testament to the positive business climate and success the company has experienced in the Commonwealth.”
In a gesture symbolizing its entrance into the local communities, Amazon will be donating $10,000 to the Federation of Virginia Food Banks to benefit Chesterfield and Dinwiddie families.
Amazon also pays sales tax in Washington, Kentucky, North Dakota, Kansas, and New York, but left Arkansas and Connecticut when asked to do the same in those states.
Question: Would you support a Quail Bell brick-and-mortar presence in Virginia or Maryland?