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The Retail Advocate

March 1, 2010

Staying on Top of the Hill: Week 6

Amazon Loophole Legislation

Last Wednesday SB 660, the Amazon Loophole legislation, was heard in House Finance Subcommittee 1 and failed to gain passage. The VRF knew that the passage of the legislation would be an uphill battle in the House when the Richmond Times-Dispatch reported that the House Finance Committee Chair stated that the “bill is dead on arrival when it reaches the House Finance Committee.” In advance, the VRF had called a press conference on Tuesday in Senate Room 1 in the Capitol where more than 30 retailers attended to express their support for SB 660. 

The opposition to SB 660 contended that passage of the bill would lead to loss of jobs for the over 5,000 internet affiliates located in Virginia.  (Internet affiliates are commissioned sales agents hired by internet retailers such as Amazon.com or Overstock.com).  These agents have web presence, such as www.Cheapesttextbooks.com.  When you use this site to purchase a textbook there may be 20 or more choices to choose from where you can buy the book.  The VRF argued that if Amazon were to discontinue their affiliation with Cheapest Textbooks then Cheapest Textbooks would have multiple other internet retailers to sell their products. Simply said, the affiliates do not count on Amazon alone to stay in business. The VRF contended that the 108,000 brick and mortar retailers who collect the sales and use tax are more likely to lose jobs if a level playing field is not provided for all retailers.

The final vote was 8 to 2 to “lay the bill on the table” (to fail to move the legislation forward to the full committee). Voting to pass the bill were Delegates Garrett, Republican from Lynchburg, and Armstrong, Democrat from Henry County. Voting to fail the bill were Delegates  Hugo, Republican, Centerville, (Chairman); Ware, R.L., Republican Powhatan; Byron, Republican Lynchburg; Peace, Republican Hanover; Anderson, Republican Prince William; Watts, Democrat Fairfax; Lewis, Democrat Accomack and part of Norfolk; and Keam, Democrat Fairfax.

When the bill was heard in Subcommittee on Wednesday, appearing for VRF were Brenda Seward, owner of Simple Pleasures Books and Gifts of Mechanicville, who has gone from a brick and mortar store to internet only and does collect sales tax from customers located in Virginia; Dane Gay from Puritan Cleaners; Givens Book and Toy Store from Lynchburg; as well as Brian Dillistin, owner of The Floor Trader in Richmond, who stated that internet retailers are his biggest competitors.

The opposition had a number of affiliates speak to how the passage of the legislation would cause them to lose jobs.

This legislation had a strong bi-partisan vote in the Senate where it passed 28-12.

One of many interesting moments in the subcommittee hearing came when the Chair of the subcommittee, Del. Tim Hugo, asked a spokesperson from the Department of Taxation, who should be a neutral representative, if the department had a position on the legislation, and the spokesperson declared that the Department of Taxation opposed the legislation and that the Governor’s office also opposed the legislation.   

One could ask, why would the Department of Taxation and the Governor oppose legislation that will level the playing field for all retailers doing business in Virginia and would also produce approximately $17 million dollars in uncollected tax revenue that the Commonwealth needs during this challenging economic time?

The battle was lost but the war continues. Still in play is the Senate budget amendment that has the same language as SB 660.  The VRF is working with members of the House of Delegates Conferees to keep the amendment in the budget as it goes forward. Delegate Kirk Cox, Vice Chair of House Appropriations Committee, is one of the most influential House conferees.  Please call Delegate Cox if you have a business located in Colonial Heights or you live in his district. Click here for contact information. Ask Delegate Cox to support Senator Colgan’s budget amendment that will help level the playing field for Virginia retailers and create millions of dollars for the Commonwealth.

Senator Walter Stosch is a conferee for the Senate and if you have a business in his district (part of Goochland, Henrico and Richmond city) or live in his district please send him a message to also support Senator Colgan’s budget amendment. Click here for Senator Stosch’s contact information.

Dealer Discount

The VRF will continue to lobby the Dealer Discount issue to achieve the highest level of allowance possible.

VRF continues to work with budget conferees to retain the dealer discount.  It is known that there will be a substantial reduction for all retailers; however we are working to have the language included in the budget that provides that the reduction is just for this budget cycle and could be adjusted as the economy improves.

Click here for legislation that has passed.

Click here for failed legislation.

Click here for legislation that was carried over until 2011.

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