The Times West Virginian


November 3, 2013

Tax change puts Internet retailers and traditional businesses on equal footing

FAIRMONT — The spotlight is on sales tax fairness as Amazon is now collecting sales tax in the state.

In April, House Bill 2754, a sales and use tax clarification bill, was passed by the West Virginia Legislature and signed into law by Gov. Earl Ray Tomblin.

This legislation established that out-of-state retailers that have a physical presence in West Virginia — a store or a distribution center — and do online sales must collect the 6 percent sales tax.

This applies to Amazon, which operates a customer-service center in Huntington. In October, Amazon began collecting the sales tax on orders shipped to West Virginia.

Other states have established similar laws. The proposed federal Marketplace Fairness Act of 2013, which is awaiting action in U.S. Congress, would give states the authority to require that all retailers collect sales taxes for Internet purchases, whether they have a location in the state or not. That money would go to the state where the shopper resides.

Ty Rogers, spokesperson for Amazon, provided the following statement: “Amazon strongly supports the federal Marketplace Fairness Act, which would resolve the sales tax issue and protect states’ rights to make their own revenue policy choices while allowing them to collect more than a fraction of the revenue already owed.”

At the time House Bill 2754 was being considered by the West Virginia Legislature, the state Chamber of Commerce asked different online businesses what they thought about the tax. The concensus from the companies was that this was a fair and reasonable tax and West Virginia should join the other states that had already adopted proposals like this, said Steve Roberts, president of the chamber.

“We did not find opposition to this tax,” he said. “Most of the companies felt that it is not problematic. They have to collect it and pay it in many other states.”

Bridget Lambert, president of the West Virginia Retailers Association, explained that the state law clarified who has to remit the sales tax to the state. It established tax fairness for all retailers.

“We definitely supported that tax change because we feel that it’s very important for retailers to be on a level playing field,” she said. “Main Street merchants are important to West Virginia’s retail industry.”

Sales tax disparities impact the businesses on Main Street and also affect the state budget, Lambert said.

“It put our local merchants at a competitive disadvantage, and we felt that it was important that (the law) be clarified,” she said.

Lambert said the law will allow West Virginia to collect money that is owed to the state.

John Deskins, director of the West Virginia University College of Business and Economics’ Bureau of

Business and Economic Research, said most of this change is about leveling the playing field.

Local mom-and-pop stores have always had to collect sales tax, but online retailers like Amazon previously didn’t have to apply the tax unless they had a physical presence in the state, he said.

Some people have said that practice is unfair to the local brick-and-mortar establishments. Deskins believes it’s much more fair and makes sense to require all entities to collect taxes in the same way and comply with the same rules.

Internet retailers often have difficulty keeping up with the different sales tax rates for the various states, and states also have variations on what is and isn’t taxable, he said. The complexity of the situation can make it very costly for online companies to comply with the rules.

Deskins said some states have moved to try to streamline sales taxes in recent years, but there have been arguments about this idea.

Dr. Amy Godfrey, assistant professor of economics in Fairmont State University’s School of Business, agreed that this tax change will put Internet retailers and normal businesses on equal footing.

“As the popularity of online shopping has drastically increased, internet retailers have been able to sell their goods without having to collect and pay sales taxes to states,” she said. “This change will require these retailers to collect and pay sales taxes on the goods purchased by West Virginia residents. This will causes these retailers to incur an initial cost of establishing a database of state sales taxes and a system to collect the correct tax and relay it on to the state.”

Godfrey believes that the taxing of Internet sales could cause a few individuals to move from shopping online to visiting regular businesses, but those businesses will feel a minimal effect. Convenience is more of a factor for people who shop online than the prospect of not having to pay sales tax.

“I believe that this change can only have a positive impact on sales tax revenues,” she said. “With many other states also collecting taxes on sales of goods to their residents, we, as a state, would be missing out on these revenues if we didn’t also collect them. I do not believe that this will have a significant impact on businesses in the state.”

Jonathan Rider, owner of Rider Pharmacy in Fairmont, said he thinks it’s necessary for the states to collect sales tax from online purchases, because it means lost revenue if they don’t.

“It’s something that I’m for,” he said. “I’m glad they’d doing it, because I think the revenues are going to the right place now.”

This change gives small businesses like Rider Pharmacy that have an online presence the same opportunities as Internet retailers.

Email Jessica Borders at or follow her on Twitter @JBordersTWV.

Text Only
  • ‘L-gov’ program of West Virginia Treasurer’s Office providing many benefits

    The “L-gov” program of the West Virginia State Treasurer’s Office is providing many benefits to governmental entities across the state, including the City of Fairmont.
    L-gov, which is an abbreviation for local government, helps cities, towns, school boards, public service districts and other entities process their bills in a streamlined, efficient way.

    July 27, 2014

  • Cardinal Tax Services-JB.jpg Helping people focus of Cardinal Tax Services

    At Cardinal Tax Services LLC, Wendy Cutlip is doing what she enjoys — helping people.
    Cutlip, owner and Registered Tax Return Preparer, opened her new business in White Hall at the beginning of June. It is located in the Mountain Gate Business Park, which is along Route 250 South just past Fabric and Foam and next to the Sunoco.

    July 27, 2014 1 Photo

  • Your chocolate addiction is only going to get more expensive

    For nearly two years, cocoa prices have been on the rise. Finally, that's affecting the price you pay for a bar of chocolate - and there's reason to believe it's only the beginning.

    July 22, 2014

  • Wal-Mart to cut prices more aggressively in back-to-school push

    Wal-Mart Stores plans to cut prices more aggressively during this year's back-to-school season and will add inventory to its online store as the chain battles retailers for student spending.

    July 22, 2014

  • Morgantown’s housing expenses exceed national average

    The housing prices in Morgantown are driving the city’s cost of living above the national average, a new survey reports.
    John Deskins, director of the West Virginia University College of Business and Economics’ Bureau of Business and Economic Research (BBER), explained that the Council for Community and Economic Research (C2ER) orchestrates data collection in 288 cities across the country.

    July 20, 2014

  • JA Used Furniture-JB.jpg J.A. Used Furniture has valuable variety

    J.A. Used Furniture in Fairmont carries items that people need — all at low prices.
    Owner Ron Dray officially opened the doors of his new business, located at 10 Locust Ave., toward the end of December. He explained that the “J.A.” initials in the store’s name stand for the names of his two granddaughters, Jordan and Adriauna.

    July 20, 2014 1 Photo

  • Backbone Security, T&T Pump Co. among 37 state companies recognized

    Two Marion County companies were recently celebrated for their continued successes in exporting.
    Backbone Security and T&T Pump Co., both in Fairmont, were among the 37 West Virginia companies that Gov. Earl Ray Tomblin, Cabinet Secretary Keith Burdette, the West Virginia Development Office and the West Virginia Export Council recently acknowledged for expanding their business to new parts of the world. An awards presentation was held in Charleston on June 24.

    July 13, 2014

  • All Things Herbal-JB.jpg All Things Herbal health and wellness shop

    All Things Herbal Local Market is a one-stop, health and wellness shop.
    Owner Christa Blais officially opened her new business in downtown Fairmont at 327 Adams St., across from Veterans’ Square, on June 6 during Main Street Fairmont’s First Friday event.

    July 13, 2014 1 Photo

  • 3-D printing continuing to revolutionize manufacturing

    As 3-D printing is revolutionizing manufacturing, the Robert C. Byrd Institute for Advanced Flexible Manufacturing continues to stay at the forefront of this technology.
    RCBI has three Advanced Manufacturing Technology Centers, located in Bridgeport, Charleston and Huntington.

    July 6, 2014

  • Blackheart International -JB.jpg Blackheart International bringing high-quality services

    Blackheart International, a firearms manufacturer and provider of logistics and training solutions, is bringing high-quality services to the local community.
    At the beginning of April, the company moved from Philippi, where it had been located since 2005, to its new home in Fairmont.

    July 6, 2014 1 Photo

Featured Ads
NDN Business
House Ads