As first reported here on January 24, ( Virginia Introduces Internet Sales Tax )Virginia introduced their version of Internet sales tax legislation on January 21. This bill, SB660, was referred to the Finance Committee. Earlier today the Finance Committee voted to approve the Virginia Internet sales tax bill by an overwhelming vote of 14-1. The bill now moves to the full Senate for vote.
So while SB660 moves forward there is an additional bill in Virginia that must be monitored. This second bill, SB705 addresses multiple tax issues that includes an Internet sales tax (as well as a digital download tax).
From SB705
2. Solicits or transacts business in this Commonwealth by employees, independent contractors, agents, or other representatives.
A dealer is presumed to be soliciting or transacting business by an independent contractor, agent, or other representative if the dealer enters into an agreement with a resident of the Commonwealth under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet site or otherwise, to the dealer if the cumulative gross receipts from sales by the dealer to purchasers in the Commonwealth who are referred to the dealer by all residents with this type of agreement with the dealer are in excess of $10,000 during the preceding four quarterly periods. This presumption may be rebutted by proof that the resident with whom the dealer has an agreement did not engage in any solicitation in the Commonwealth on behalf of the dealer that would satisfy the nexus requirement of the United States Constitution during the four quarterly periods in question;
Compare this to SB660, a double threat of Virginia Amazon tax. While SB705 is still in committee, SB660 is moving forward.
As part of the fiscal statement for SB660 mention is made of the revenue gains in New York. Estimated $70 million in the current fiscal year ($53 million during 2008 the first year law was only in effect for 3 quarters). Adjusting for the differences in sales tax rates and population they are estimating an additional $17 million in sales tax revenue in Virginia when/if the law takes effect.
Hopefully, affiliates have been preparing, Virginia Internet sales tax will change your business. There are many quality merchants who will welcome affiliates from Virginia just as they welcome NY, NC and RI.
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Oh wow! Internet sales tax? Everyone is using an internet. That would likely make the state more prosperous.
Yeah it might make the *state* more prosperous but….it may also make the internet marketer (the one bringing the business in in the first place) less prosperous. What I mean by that is; if companies (Amazon for example) decide that it is more *prosperous* (or less costly) not to do business in that state then the consumer and the marketer both loose. Personally I think these states that are considering (or actually already are) imposing these ‘taxes’ are shooting themselves in the proverbial foot. These same states give millions each year in tax breaks (and bailouts) to bring what they consider big business in…at several billion dollars a year world wide, isn’t internet marketing “big business”???
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