For the first time in American retail history, online shoppers are required to pay state sales tax in Virginia and West Virginia due to new laws.
Last year, the US Supreme Court allow a number of states to collect taxes from out-of-state vendors with no physical stores. The decision reportedly blow online retailers who don’t have any physical stores within the state.
The decision was 5-4 in favor of the new sales tax, however, it made it difficult to collect payments on certain online purchases. This calls the Supreme Court a ruling to end the problem with the tax collection.
Earlier this year, the Virginia General Assembly passed a law allowing the state to collect sales tax from online purchases, regardless of whether the retailer has a physical store or none. “When you’re talking about, you know, maybe 100 or more dollars difference if you’re not paying tax, they’re going to go ahead and take the risk and make that purchase. Now, maybe we’ll get a little bit more of those kinds of purchases here locally,” said Charlottesville Chamber of Commerce president Elizabeth Cromwell.
Virginia local authority claims that one percent of the tax collected goes back to the locality to fund schools, police officers, and other needs of the local government.
According to Virginia authorities, this new law can be a game-changer for large retailers who get away with sales tax for years. Cromwell added, “I think it’s kind of an inevitable process. You know, are those retailers locally who sell across state lines negatively impacted? Yes, but I think the overall importance is better overall for the business community here.”
About 1,200 online retailers have signed on for the new sales tax. Companies like Amazon had been collecting state sales tax after the national decision.