Could have been worse

Published 10:10 am Saturday, March 20, 2010

While not suffering the blows that Virginia General Assembly budget writers imposed on certain core services, retailers were hit with moderate revenue cuts and tax gimmicks that will surely impact the industry’s attempt to rebound from a down economy.

The Virginia Retail Federation came away with a few big wins, like preventing a plastic bag ban and fees, while playing defense in most areas. The VRF’s attempt to level Virginia’s economic playing field for brick-and-mortar retailers by forcing the state’s Internet retailers to collect the sales and use tax was strongly supported by the Senate and survived the budget conference until the final day.

The VRF will work with Sen. Emmett Hanger to bring the bill back next year and work out of session to convince Gov. Bob McDonnell and House Speaker Bill Howell that Internet sales tax compliance is “the right thing to do.”

Here’s a look at other issues of interest to retailers:

■ Plastic Bags. The VRF singlehandedly convinced Delegate Joe Morrissey, patron of HB 521 banning the use of plastic bags, to pull his bill out of the committee. An attempt by Delegate Adam Ebbin to impose fees on plastic bags was also defeated by the VRF in a House subcommittee. VRF staff pointed out the successful plastic bag recycling programs funded by VRF efforts at last year’s General Assembly and still going strong in Isle of Wight County and Alexandria. Since kicking off its project last August, Isle of Wight County has recycled close to 3 tons of plastic bags.

■ Amazon Sales Tax Loophole. The grassroots effort led by VRF members to close the loophole allowing Internet retailers with operations in Virginia to avoid sales tax collection was highly successful for a first-time bill. It revealed the unfair advantage Amazon and its giant peers enjoy over brick and mortar Virginia retailers. Political contributions from the powerful Northern Virginia Technology Council (NVTCP) were a major factor in the defeat of the bill by House Republicans and Gov. McDonnell.