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Amazon Begins Collecting Online Sales Taxes in Virginia

Virginians essentially had been getting a discount by buying sales tax-free products from Amazon instead of a brick-and-mortar retailer.

Amazon.com box (Patch file photo)
Amazon.com box (Patch file photo)

Online powerhouse Amazon began collecting sales taxes from buyers with Virginia addresses this week.

Virginia joins a group of other states including Arizona, California, New York and Texas where the online retailer has agreed to collect sales taxes from residents, after years of insisting they had no legal rights to collect sales taxes from its customers, reports Washington Business Journal.

According to a report in GlobeSt.com, the move likely infuriates other large e-tailers that have enjoyed sales-tax free status. There is currently a bill circulating in Congress – the Marketplace Fairness Act – that would require all online retailers to apply local sales taxes to all purchases. Proponents of the measure say that change would level the playing field with brick-and-mortar retailers, which must collect sales taxes if a state requires it.

The move was expected as Virginia Gov. Bob McDonnell last year announced the agreement when the commonwealth's General Assembly gave final approval to a bill expanding on existing state law requiring online businesses with facilities in Virginia to pay the state's 5 percent sales tax.

Sen. Frank Wagner, who sponsored that bill, said at the time that Virginia can expect to gain at least $23 million in tax revenues in 2013 alone.

Amazon operates a warehouse and data center in Virginia.

Will paying sales taxes for purchases via Amazon.com change how you do business with them? Will you shop elsewhere? Tell us in the comments.

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