Virginia Weighs Sales Tax for Online "Marketplace Facilitators"

Mar 12, 2019

Credit Marcie Casas / Creative Commons

Virginia’s sales taxes are currently stuck in the last century. But, state laws on sales taxes are about to go back to the future.

Wayfair, you’ve got just what Virginia needs — $155 million in new sales tax revenues. The Supreme Court decision last year in South Dakota versus Wayfair opened the floodgates to states requiring online retailers like Amazon to collect Virginia sales tax. But what about the online middleman?

“We do not own any goods. We do not sell any goods. We do not warehouse any goods. We purely facilitate a transaction between a small-business seller and a purchaser," says eBay lobbyist Ross Grogg. "And while we are dealing with this in 50 states, we want to make sure we get it right.”

Getting it right means delay. After an intense lobbying effort, so-called marketplace facilitators got a 90-day delay, which will end up costing Virginia about $42 million in lost revenue.

Chris Wodicka at the Commonwealth Institute says Governor Ralph Northam has the power to change that.

“It would be good for the governor to possibly amend it to remove that from the legislation or clarify it as part of a budget amendment,” says Wodicka.

So, will the governor amend the bill and force eBay and other marketplace facilitators like Etsy to start collecting sales tax at the beginning of the fiscal year? So far that’s an open question. A spokeswoman for the governor says he’s currently in the process of reviewing the legislation.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.