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Businesses in Virginia argue that competition is unfair

Virginia business owners are pushing legislators in the state to impose sales taxes on online retailers. Although some retailers, such as Target, include sales taxes that are calculated based on the consumer's location, this reflects the fact that these firms have physical presences in many locations. Other companies that engage exclusively in online retail and do not have outlets, such as eBay and Amazon, are being targeted for not charging sales tax. Amazon will start requiring online sales taxes in Virginia in 2013.

Business owners claim that the lack of online sales tax is causing them to lose customers. While the U.S. Congress is reviewing the Marketplace Fairness Act in light of these concerns, many online retailers point out that pending tax legislation may simply cause other unfair burdens. In addition to ensuring that Internet retailers have to comply with thousands of separate jurisdictional tax rules across the country, they may also be subjected to audits or business litigation.

Although retail merchant associations claim to want fairer playing fields, there is no guaranteeing that new tax legislation will deliver it, and it may even work against those physical retailers who try to expand their businesses by selling online. If compliance is too difficult, then individual sellers affected by the legislation may be subject to large legal costs or fines. The firms they operate through may not even suffer because they already offer methods for applying state sales taxes properly and only facilitated sales.

Many online retailers and small businesses may fall afoul of new Congressional legislation and rules in Virginia and nationwide. Because legal requirements remain as yet unclear, those who do may have little other recourse besides seeking attorney assistance. Retailers in Virginia who believe that their online competitors have unfair advantages may wish to consult business litigation attorneys who may explain their rights and options and recommend courses of action.

Source: NBC12, "Central VA businesses fear unfair Internet competition," Brent Solomon, Mar 20, 2013

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