Amazon bill is a tax increase
By Brian Kirwin | Sunday, January 22nd, 2012 | PoliticsSomething bothered me with the headline of the Daily Press editorial endorsing the move to have Virginia shoppers on Amazon pay sales taxes.
The headline read “Ante up, Amazon.” Wrong!
The headline should’ve read “Ante up, Virginians” since Amazon isn’t going to pay a nickel. You and I will. Where the heck do they think Amazon is going to get these sales taxes?
Currently, Virginians pay no sales tax on Amazon, and government says that equates to $25 million of lost revenue for government. Forcing Amazon to charge sales tax RAISES taxes on you and me, not on Amazon.
I understand the argument that online retailers shouldn’t be exempt from the rules that stores in Virginia have to abide by. I get it. And I understand that people are supposed to voluntarily pay sales taxes on online purchases, but that works about as well as telling Obama not to play so much golf.
But make no mistake, and the Daily Press made it, that Sen. Frank Wagner’s bill SB597 isn’t a tax increase on Amazon.
It’s a tax increase on us. It can be considered nothing else.
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The right wants to jeer him. The left wants to censor him. Moderates usually want both. Brian Kirwin is a political consultant and public relations strategist in Virginia Beach with a lightning-rod flair. Brian also serves on the VB Arts & Humanities Commission and frequently appears on Hampton Roads theatrical stages, if only to prove that all actors aren’t liberals. Kirwin’s columns stir up debate and hit the political scene with no punches pulled.
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22 Responses to "Amazon bill is a tax increase"
Food for thought, Once they start taxing the internet, then it’ll need to be regulated. What’s the thought of a backdoor internet control agenda? They are biting at the bit to gain control of the internet.
So am I reading that right? If Amazon does not “maintain a distribution center, warehouse, fulfillment center, office, or similar location within the Commonwealth that facilitates the delivery of property sold by the dealer to its customers” then the presumption of having to collect retail sales and use taxes does not attach to them?
Brian, This is a fundamental matter of fairness. It is not a tax increase. Amazon should, as every brick and mortar business, collect state sales tax on purchases. Wal Mart does on their web site, Costco does. This is a loophole that Amazon has said it is willing to change in California. Why shouldn’t Virginia get the same revenue ?
Tucker, who pays?
From where does “Virginia” get this “revenue?”
Current state law requires you to pay the sales tax on all internet or mail order purchases. But most people do not pay or are not aware that they are supposed to pay. This bill does not create a new tax, it would just require Amazon to collect a tax that people are already supposed to be paying.
Amazon opened a warehouse in Virginia, but they have avoid collecting taxes because they are not the sole owner – they own a majority of it, but not all of it. They did it that way just to try to avoid collecting the state sales tax. This legislation would close that loophole.
Doesn’t this issue involve the constitution?
I always thought the reason you did not have to pay sales tax on orders from out of state mail order companies was because such a tax would be an unconstitutional tax on interstate commerce.
If I travel into North Carolina and buy something, I do not pay Virginia sales tax just because I am a Virginia citizen. If I place my order from the North Carolina firm over the internet or via the US Mail, am I now subject to the tax.
Now, I am a truck driver. What happens if I am traveling out of state and place my order via the internet while out of state from the North Carolina firm? Does Virginia still expect me to pay sales tax on the purchase?
I really dislike the sales tax anyway. It is not progressive. The homeless pay the same rate of sales tax as would Warren Buffet.
The economy stinks. Governments at all levels are starved for revenue. They will never say “we need more money because we have to keep paying people who reliably vote for more government,” they will say “we have to reform the tax system” or “that company / person over there isn’t paying their fair share.”
It’s only going to get worse, I promise.
Amazon collects sales tax in five states — Kansas, Kentucky, New York, North Dakota and Washington — where it has offices or another physical presence. It avoids collecting in several other states where it has warehouses by assigning their ownership to a subsidiary. One problem is that Amazon has eliminated their “affiliate” program in Rhode Island, North Carolina and Colorado where these states have tried to impose similar legislation.
Back in September of last year, California backed off on Amazon collecting tax because of the negative affect it would have on the huge number of in-state businesses. This was summarized by George Runner, a member of California’s Board of Equalization, which collects several kinds of taxes: “changing tax laws would end up hurting Amazon’s 10,000 affiliates in the state. Amazon would simply continue selling products directly from its Web site or through out-of-state affiliates, without having to collect tax on the government’s behalf, he said. California would end up with no extra money, Mr. Runner said, despite predictions otherwise in fact, it may get less considering the financial damage done to Amazon’s affiliates.” Amazon can always physically or virtually move, but Virginia can’t. Our Virginia politicians had better explore the consequences and think before they vote on this, or is that an oxymoron?
I don’t know anyone who voluntarily pays such taxes.
Brian -Right now the tax is due,it’s just a question of how it is collected, whether by Amazon when the purchase is made, or by the purchaser is they are billed by the Commonwealth. I have a friend who, years ago, bought furniture in NC, had it shipped to him in Va and got a big bill from the commonwealth for the tax. What is the difference in Amazon ? Why should I pay tax for an online sale when I buy from Walmart.com but now Amazon.com. It’s an unfair deal for Virginia and anticompetitive.
Tucker, it that was true, there would be no 25 million in new revenue. It’s a tax increase.
Brian, it’s as much the principle as anything. Not a new tax. An old tax being collected finally making a fair playing field for all.
If you want things to be fair we could start by getting rid of the encyclopedia sized tax exemptions this state hands out. That alone would save money by not having to print all the legislation that is generated every January, cutting the GA workload down to about a week.
Brian,
Currently the buyer is suppose (“suppose” being the operative word) to be paying Use Tax to Virginia for Internet purchases. Therefore, it simply ensures collection of taxes already mandated.
What about the cost/burden this will place on internet businesses to become tax collectors for the states and, in many areas, local jurisdictions?
It’s not a question of raising taxes it’s a question of enforcing the tax laws we’ve got.
Look, tax exemptions on the Internet made sense when it was a fragile new technology and people were suspicious of e-commerce.
That hasn’t been the case for some time.
Amazon isn’t going to go out of business because it has to abide by the same rules as the Chop Suey bookstore in Richmond.
This is absolutely NOT a new tax increase. There is a sales and use tax on every item purchased by a Virginia resident whether it’s online or in the store. Most online retailers collect and remit the tax. Amazon does not, which puts the burden on the unsuspecting consumer to keep track of the purchases by Amazon and remit the money on their income tax. But Amazon HAS a distributon center in Virginia, so they should be collecting anyway. This is just closing a loophole. One of the basic principles of free market capitalism is that there needs to be a level playing field for all competitors. Amazon is simply trying to game the system. Amazon has also cut deals with Indiana, California, South Carolina and Tennessee to voluntarily start collecting the tax as early as September 1 of this year.
Republicans are interested in freedom. Democrats are interested in fairness.
Remember it.
I agree with Brian that it is a tax. It is just like the new taxes that have been labeled fees, tolls and employee VRS contributions… Call it what you want, it is a tax that will be paid by people to the government.
The conservative position on this issue is to close the loophole. Isn’t that one of the founding principles of the tea party? No more ‘credit default swaps’ and things we don’t understand. Conservative Republicans across the country are all seeking to close the loophole – Mitch Daniels two weeks ago worked out a deal to have Amazon start collecting the tax in the future. Gov. Haslem in Tennessee did the same thing. Haley Barbour issued a statement in support of closing this loophole. Even the Conservative Caucus in Texas supported closing down the loophole. Nathan Deal in George just last week issued a statement to the same effect. The best way to avoid new tax increases in the future is to make sure you are collecting the taxes that are already owed (in addition to government efficiency etc.). Make no mistake, this is no NEW tax increase. It’s simply COLLECTING the existing sales tax. My preference would be getting rid of the sales tax altogether. But short of that, everyone should play by the same rules.
I’m more than happy for the schleps in other states that get to pay Amazon taxes.
There are lots of unfair things in this world, and the first thing on my list is NOT to have Virginians pay more taxes so people in other states can feel like it’s more fair.
[...] supposed to declare on their returns (but likely don’t). But as Brian Kirwin has previously noted, it walks and talks like a tax [...]
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