February 18, 2010, 12:00 AM

Virginia online sales tax bill clears state Senate

A bill mandating sales taxes for online purchases from retailers with affiliates or facilities in Virginia won state Senate approval this week, though passage increasingly seems unlikely.

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A bill mandating sales taxes for online purchases from retailers with affiliates or facilities in Virginia won state Senate approval this week, though passage seemed unlikely.

The state Senate Tuesday voted 28-12 to approve SB660, commonly called the Amazon Bill. The bill now goes to Virginia’s House of Delegates.

 

The bill would require retailers to collect a 5% sales tax on online purchases. The bill is named for the web retailing giant because Amazon, No. 1 in the Internet Retailer Top 500 Guide (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name), maintains buildings in the state. Supporters of the bill say a U.S. Supreme Court decision enables sales tax collections from online retailers that have warehouses, offices or affiliates in a state.

 

E-retailers such as Amazon, Overstock.com and Blue Nile, have in the past year cut ties with affiliates in states that have passed similar measures. The governors of California and Hawaii last year vetoed similar sale tax laws after the retailers said they would cut off affiliates in those states.

 

The Virginia bill now moves to the House Finance Committee. The chairman of the committee, Republican Harry Purkey, said this week the bill was dead. Gov. Bob McDonnell, a Republican who took office in January after vowing not to increase taxes, said through a spokesperson this week that collecting taxes from online purchases could harm the state’s economic growth.

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