Tomblin targets online sales for tax revenues - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Tomblin targets online sales for tax revenues

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LAWRENCE MESSINA, Associated Press

CHARLESTON, WV (AP) — Online retailers like Amazon that have facilities within West Virginia would have to collect the state's 6 percent sales tax on purchases by residents, under legislation introduced Wednesday for Gov. Earl Ray Tomblin.

The governor's proposal opens a new bid to reap revenues from e-commerce. Brick-and-mortar businesses, which are subject to sales taxes, complain they must compete with online rivals on an unfair playing field. West Virginia has long belonged to a multi-state coalition that pursues sales taxes through cooperating retailers. Wednesday's bill also comes amid similar efforts in other states and in Congress, where the latest version of the proposed Marketplace Fairness Act was introduced earlier this month.

Tomblin's measure would apply to an out-of-state retailer that maintains a warehouse, office or other facility in West Virginia. Amazon recently opened a 70,000-square-foot customer service center in Huntington. A spokesperson for the Seattle-based e-commerce giant did not respond to requests for comment Wednesday.

States have pursued this approach to collecting e-retail sales taxes since a 1992 U.S. Supreme Court ruling barred them from seeking such revenues from businesses without a physical presence within their borders.

Indiana lawmakers plan to introduce such a proposal this year in their state, which has hosted an Amazon warehouse since 2007.

Georgia adopted a law this year requiring Amazon to collect taxes on in-state sales, but officials there say the retailer isn't complying. Meanwhile, Amazon announced earlier this month that it would begin collecting Connecticut's sales tax, ending a two-year legal dispute there, while promising to spend $50 million to build an order-fulfillment center and create hundreds of jobs.

After shuttering distribution centers and canceling contracts in fights with states over sales taxes, Amazon as of late last year had begun collecting them on orders shipped to seven states, including New York and Texas, while agreeing to do the same in six more.

Nearly half the states, including West Virginia, have signed onto the Streamlined Sales and Use Tax Agreement. Online and catalog retailers voluntarily agree to levy sales taxes on behalf of compact participants. Deputy Revenue Secretary Mark Muchow said it has yielded $4 million to $5 million for West Virginia annually.

"It's been somewhat successful in collecting revenue for the state," Muchow said Wednesday

But a recent University of Tennessee study estimates that West Virginia missed $50.6 million in sales tax revenues from e-commerce last year.

"It is the position of the West Virginia Chamber of Commerce that everyone who owes tax should pay it," Chamber President Steve Roberts said. "We are happy to support the governor in his proposal, to ensure that those who owe tax are either collecting the tax or are paying it from their own resources."

Sales and use taxes are projected to bring in nearly $1.2 billion during the budget year that ends June 30, or close to 30 percent of West Virginia's general tax revenues. The taxes had yielded $727 million by the end of January, or nearly 1 percent below their to-date estimate. Little or no growth is projected for general tax revenues during the coming budget year.

Tomblin's legislation has been assigned to the House and Senate finance committees.

 

Copyright 2013 The Associated Press