The Virginia Senate voted Friday to close the so-called Amazon loophole that has allowed the online retailer giant to duck the state sales tax.
The bill, sponsored by Sen. Frank Wagner (R-Virginia Beach), would require retailers with a physical presence in the state to collect and pay the state sales tax.
Virginia business groups started calling for the measure late last year, when it was announced that the online retail giant, which already operates a distribution center in Northern Virginia, would open two more in the Richmond area this fall.
“The legislation will create a more level playing field for Virginia retailers,” Wagner said. “Companies with a physical presence in the state should all play by the same rules.”
The bill sailed through the Senate on a bipartisan 34-6 vote. It now heads to the House for consideration.
Amazon has faced criticism from state and federal officials for not paying state sales taxes. Some states have passed laws requiring the payments.
Internet sales are subject to the same 5 percent Virginia sales tax as sales at bricks-and-mortar stores. But if an online retailer does not collect the tax, it is up to customers to pay it on their state income taxes, though it is believed that many do not know that.