Committee passes legislation to make Amazon pay tax

Posted on: 6:48 pm, February 7, 2012, by , updated on: 04:46pm, February 8, 2012

RICHMOND, Va. (WTVR) – Legislation that will require Amazon retailers to pay Virginia state sales tax was unanimously passed in the Senate Finance Committee this morning. There are Amazon distribution centers in about 13 states, and currently Amazon has agreements to pay sales tax to four of those states– California, South Carolina, Indiana and Tennessee.

In December 2011, Amazon announced plans to open two distribution centers in Chesterfield and Dinwiddie counties. Gov. Bob McDonnell said the centers would combine to create 1,350 new jobs, and a $135 million dollar investment.

In fact, a spokesman for Gov. McDonnell told WTVR.com that the Amazon news has been the biggest jobs announcement in Virginia since 2004.

Virginia law states those companies, and their subsidiaries, that operate warehouse or distribution centers must collect and remit the state sales tax. Senator Frank Wagner sponsored Senate Bill 597, which states that online retailers and distribution centers can’t be allowed to use complex corporate structures to avoid collecting and remitting the state sales tax.

Amazon is the only known retailer in Virginia that has created a separate distribution subsidiary; a loophole that some say is for the presumed purpose of avoiding the sales tax obligation.

Spokesperson for The Virginia Alliance for Main Street Fairness, Robb Shinn, said that states are moving quickly around the nation to address the issue.

A release from Shinn said that a legislative study has been determined that Virginia could recognize $24 million in uncollected tax revenue on an annual basis if the bill passes.