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.
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