Response: Editorial regarding Viginia SB 660

Virginia news organization published an editorial today entitled “Equalize Internet sales with tax.”

This article, and the editorial intent behind it are flawless – and the piece is well written and to the point. It illustrates cleanly and clearly why sales taxes should be collected on all Internet transaction with Virginia residents.

Unfortunately, it seems to be referring to Virginia Senate Bill 660, the Virginia legislature’s version of another Amazon Tax. The National Retail Federation estimates SB 660 could produce up to $18M in revenue for Virginia next year – but only if affected Internet retailers do not suspend affiliate marketing programs in Virgina. As was demonstrated in North Carolina and Rhode Island last year, such an assumption could prove disastrous. When those states passed similar legislation, the Internet retailers simply suspended all affiliate relationships in those states yielding zero revenue growth and adding lost jobs and business closures instead.

This is unfortunate on several levels, but perhaps most frustrating for Virginians is that SB 660 seems to be passing while less than 1 week earlier a better and more appropriate legislation, Virginia Senate Bill 340, was delayed for consideration until 2011.

Under Virginia SB 340, Virginia could be able to collect $156.6M in additional sales tax revenue in 2010 (almost 9 times more revenue than targeted by SB 660).

Naturally, we posted a response directly on the site.

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