For many years, state leaders in Virginia have been trying to collect sales taxes on purchases from outside the state. Now Virginia Governor Terry McAuliffe has a plan.
Even before internet sales became popular, state leaders in Virginia were trying to collect taxes on catalog sales. It’s an effort that led to the Marketplace Fairness Act, which is currently stalled in Congress. John Buhl at the Tax Foundation says it’s taking so long because lawmakers need to find a way to simplify a very complex system.
“If I’m in Texas or Iowa, if I sell something to Louisiana it might be taxable at the state level and not at the local level or vice versa and that creates a lot of confusion and so ideally a congressional solution would simplify things,” says Buhl.
Until Congress acts, though, Virginia Governor Terry McAuliffe wants a piece of the action. His budget proposal includes a provision that would allow Virginia to collect sales taxes from retailers who use Virginia warehouses or distribution systems.
David Rehr at Antonin Scalia Law School says he’s skeptical.
“When you raise taxes, you tend to drive prices to be higher and there’s less value for consumers," Rehr says. "A lot of consumers are shopping online to get the best deals for them, and they’re not really concerned if the state gets paid or not.”
McAuliffe estimates the proposal would raise about $21 million — if if passes the General Assembly.
