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January 24th, 2010, 08:05 PM #1Virginia Internet Sales Tax
Virginia has introduced SB 660,, their version of the affiliate tax. Similar to the other existing and pending legislation.
SB 660 http://leg1.state.va.us/cgi-bin/legp...?101+sum+SB660
January 24th, 2010, 09:12 PM #2
Forget internet sales tax, I bet nobody knows of this gem already in the law (not being added with the internet part):
C. A dealer shall be deemed to have sufficient activity within the Commonwealth to require registration under § 58.1-613 if he:
3. Advertises in newspapers or other periodicals printed and published within this Commonwealth, on billboards or posters located in this Commonwealth, or through materials distributed in this Commonwealth by means other than the United States mail;
January 24th, 2010, 09:23 PM #3
Exactly right Joshua, many states already have existing laws that could require remote sellers to collect and remit. We've mentioned it here before. I've also referenced it several times on the webinars. Some states are choosing to enact new legislation to make it clearer but others are simply beginning to enforce current laws. That accounts for many of the terminations in Wisconsin, Missouri and other states. This aspect is being ignored, perhaps because it hasn't affected any widely known affiliates or because it would cause mass hysteria and more terminatons.
Critical for every affiliate to read and understand the current nexus laws.
January 27th, 2010, 02:42 PM #4
- Join Date
- October 16th, 2006
- Washington D.C.
I wanted to bump this thread. Although another one has been started, this was reported first and since this is in my backyard I think it is very important to start organizing the Mid Atlantic People. We have DC/MD/VA all in the same area.
February 8th, 2010, 11:35 PM #5
The impact statement does have a decent consideration in it:
The revenue impact of this bill would depend on the response to its enactment by affected online retailers. Given the response to similar legislation enacted in other states, it is unlikely that online retailers would comply with the provisions of the bill and begin to collect the Retail Sales and Use Tax.
When similar legislation was enacted in Rhode Island and North Carolina, large online
retailers ended their affiliate programs. If this were to happen as a result of this bill, there would be no additional revenue from the enactment of this bill. In fact, by ending the affiliate program with Virginia vendors, such vendors would likely lose business and remit less Retail Sales and Use Tax to Virginia. Ending affiliate agreements in Virginia would also reduce or eliminate the commissions and profit that the affiliates receive from these agreements. Although there is only very limited publicly available data, the reduction or elimination of such commissions and profits would likely have a negative impact on those businesses’ profits.
February 10th, 2010, 04:54 PM #6
There's also a second bill as back up threat. The second bill addresses several tax issues including the Internet sales tax and a digital download tax.
While SB660 moved out of Finance committee today and is going to full Senate the other bill is still in committee.
February 10th, 2010, 05:56 PM #7
February 12th, 2010, 02:34 AM #8Originally Posted by Anne
February 16th, 2010, 11:09 AM #9
A few nights ago I spent hours writing every senator in VA. I only got one response and it's not good. If this is how they all think, we don't stand a chance. Here it is:
Thank you for your message regarding Senate Bill 660. Simply put, this bill is a compliance issue and clearly not a new tax.
The legislation would close a loophole that is allowing some internet retailers to avoid collecting the required state sales and use tax at the point of sale, the same requirement that is placed on other internet and traditional store retailers today.
Besides making the law consistent and fair for all merchants, the legislation would remove the onerous responsibility on the consumer to remember to pay the required sales tax on all internet purchases at the end of each year.
It is entirely unfair to put traditional storefront retailers and other online retailers who are in compliance with current state law at a competitive disadvantage. This legislation gets at those few who are benefiting from a small loophole and costing Virginia millions in lost revenue.
February 16th, 2010, 11:14 AM #10
- Join Date
- May 27th, 2009
Senator Hanger's response is the only I've received as well. I'm hoping for at least a few more today, but either way, it's not looking good.
Although, I believe it was Hanger who introduced the bill, so naturally you'd expect such a response from him.
February 16th, 2010, 01:35 PM #11
February 16th, 2010, 02:26 PM #12
February 16th, 2010, 06:52 PM #13Originally Posted by MattMcWilliams
House is 59 red 39 blue and 2 grey(I)
Governor is Red.
You guys have a good chance keep the battle going!
Try to all go to the house comittee meeting (public hearing). Not sure when that would be?
February 17th, 2010, 10:34 AM #14
I got a reply from one of the "good guys":
Dear Ms. Bendzunas,
Thank you for writing to share your opposition to SB 660, which, as
you may know, passed the Senate yesterday by a vote of 28-12. I was
among the twelve senators who voted against this bill, and I did so
because I was deeply concerned by how the legislation defines a
substantial nexus to the Commonwealth and how that will impact those
who do business in Virginia, and importantly for our state, those who
are affiliates with these firms.
Other states that have adopted similar legislation have faced
expensive court battles or significant industry losses, and I am
concerned that this bill creates similar challenges for Virginia which
could hamper economic activity and perhaps even reduce tax revenue,
the enhancement of which is the putative goal of the legislation.
Accordingly, I voted no, though, unfortunately, the bill did pass. It
now heads to the House, where I hope and expect that these and similar
concerns will be taken up and addressed.
Thank you once again for writing me on this issue, and please do not
hesitate to contact me again should you have any further questions or
With best regards,
Mark D. Obenshain
Virginia State Senator
February 17th, 2010, 11:06 AM #15
- Join Date
- October 16th, 2006
- Washington D.C.
February 17th, 2010, 03:54 PM #16
Promising News article from a Virginia newspaper:
But the measure, pushed by bricks-and-mortar retailers who say that their Internet competitors have an unfair advantage in selling products tax-free, appears doomed in the House.
"It's dead," said Del. Harry R. Purkey, R-Virginia Beach, chairman of the House Finance Committee, the bill's next stop. Among his concerns: questions about administering a tax on sales not made face-to-face.
Gov. Bob McDonnell also opposes the measure, known as the "Amazon bill." It is named for the giant Internet retailer, which serves its customers, in part, through two facilities in Northern Virginia.Brad Waller | VP, Business and Affiliate Development
February 17th, 2010, 04:43 PM #17Originally Posted by bcwaller
This bill might die during the commitee hearing. Try to attend that hearing...
February 17th, 2010, 08:08 PM #18
Once it fails, I can move my business address back to VA. If it somehow passes, I'll be safe until the third state I have an address in (with a Republican governor) tries to pass a similar law. If that happens, mailbox rental in the neighboring red state, here I come.
February 18th, 2010, 12:23 AM #19Originally Posted by Joshua
February 18th, 2010, 01:57 PM #20
As Michael said, you can't just change your mailing address. It might keep you from getting kicked out of a program at first, but still has the same issue as you are a resident of the state and you earn the money. Unless your tax address is also in the other state, and you pay taxes there, then you will still be a resident of your home state.
It is not so clear what happens if you set up a corporation in another state. I've seen it argued both ways here.Brad Waller | VP, Business and Affiliate Development
February 19th, 2010, 04:31 AM #21Originally Posted by bcwaller
I'm not sure what happens if you are actually a consultant in a targeted state for an out of state business?
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