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Virginia Politics
Posted at 09:19 AM ET, 12/23/2011

With Amazon’s move to Va., companies want the Internet giant to pay taxes

Business groups reacted cautiously to the news that Amazon.com plans to open two distribution centers in the Richmond area next fall, employing 1,350.

The Virginia Retail Federation, the Virginia Retail Merchants Association and the Alliance for Main Street Fairness all called on the Internet retail giant to collect and pay sales taxes in the state.

The company has faced criticism from state and federal officials for not paying state sales taxes. Some states have passed laws requiring the payments.

“Every retailer should be playing by the same set of rules and let fair competition determine winners and losers in the marketplace,’’ the association said in a statement. “It is not appropriate for state and local tax dollars to be used as economic development incentives unless Amazon agrees to collect and remit state sales taxes. If they do not make this agreement, Virginia is likely to be a net job loser with this deal.”

Internet sales are subject to the same 5 percent Virginia sales tax. But if an online retailer does not collect the tax, it is up to the customer to pay it on their state income taxes, though many do not know that.

Amazon collects and pays state sales taxes in five states where they have physical facilities. The company already has one distribution center in Northern Virginia.

Gov. Bob McDonnell (R) announced Thursday that the company plans to open a pair of centers in Chesterfield and Dinwiddie counties. State officials say it is the largest single economic development deal since 2004 in terms of jobs created.

The state spent more than $4 million to lure the company to Virginia.

By  |  09:19 AM ET, 12/23/2011

 
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