There’s a Virginia angle to consider that may make watching the U.S. House of Representatives’ deliberations on the Marketplace Fairness Act worthwhile.
The bill would let states collect sales taxes from online retailers. The aim is end a competitive disadvantage that retailers operating actual stores suffer – it’s easy to collect sales taxes from them, not so much for competitors doing business in cyberspace.
As Sen. Tim Kaine noted a few days ago in Roanoke, the transportation funding compromise worked out by Gov. Bob McDonnell and the state legislature this year says any extra sales tax revenue collected from online retailers as a result of such a federal law would go for transportation.
What he didn’t mention, but a quick re-read of the transportation bill shows (yes Blue Ridge Caucus has no life) is this:
If there’s no federal law, the new wholesale tax on gasoline would jump 45 percent.
It is now set to go to 3.5 percent of the wholesale price. (At current wholesale prices in Virginia of $3.051 per gallon for re-sale, that means just under 11 cents a gallon, by the way, compared to the current gasoline tax of 17.5 cents a gallon)
Without a federal law allowing states to collect sales tax from online retails, that tax would rise to 5.1 percent of the wholesale price. At current wholesale prices, that means a 15 cent a gallon tab.
Also making House action on this of interest in western Virginia is the longstanding leadership of Rep. Bob Goodlatte, R-Roanoke County, in Internet policy.
Goodlatte has said he is disappointed with the Senate’s Marketplace Fairness Act on online sales tax collection, and promises a more thoughtful consideration in the House.
“I do not believe the Marketplace Fairness Act is sufficiently simplified yet,” he said.
“There is still not uniformity on definitions and tax rates, so businesses would still be forced to wade through potentially hundreds of tax rates and a host of different tax codes and definitions. There is also concern that despite disclaimers the bill could create due process type concerns regarding the ability for affected businesses to sufficiently petition for relief from aggressive state actions and could open the door for states to tax or even regulate beyond their borders.”