It was one of the big economic development announcements of 2011 when Gov. Bob McDonnell welcomed giant Internet retailer Amazon to Virginia.
Last fall, Amazon unveiled plans to construct two distribution centers in the commonwealth — in Dinwiddie and Chesterfield counties — along with more than 1,300 jobs.
But it came with a price to Virginians and Virginia bricks-and-mortar businesses.
Ever since the dawn of the Internet age, online retailers have been exempt from charging sales taxes on their cybersales. The purpose, as first conceived, was to encourage growth of the Internet and of Internet businesses.
In the early days of the Internet, that was wise public policy because it encouraged the growth of a segment of the economy that, today, is performing like gangbusters.
Amazon today, though, is no longer a struggling retailing underdog. Its stock trades on Nasdaq at more than $185 a share. It has a market cap of more than $85 billion. And last year, the company notched earnings of $17 billion.
Yet sales on Amazon are still exempt from sales taxes. And, as part of the package of incentives to lure Amazon to the commonwealth, Gov. McDonnell wants them to continue that way.
On today’s Op/Ed page, local businessman Danny Givens states his argument that this is, inherently, an unfair advantage given by the state to one business at the expense of others.
It’s difficult to find fault with Givens’ argument or with legislation making its way through the General Assembly to address the situation.
Frank Wagner, a Republican state senator from Virginia Beach, is chief patron of legislation, Senate Bill 597, that would treat Amazon like any other business in the state.
Local retailers — whether locally owned like Givens Bookstore or part of a chain like Walmart — have made an investment of capital and personnel in a town. They hire local workers, pay a host of state and local taxes and collect state sales taxes. Why should a retail giant like Amazon be treated differently simply because its business model is based solely on the Internet?
The local retailers, the local employers, the local taxpaying businesses are simply asking for a level playing field. What’s so wrong with that?
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