We all agree--close corporate tax loopholes
February 21, 2012
The News and Advance reports, "With every item owner Bill Puckett sells at Lynchburg Camera Shop, he has to add a 5 percent state sales tax onto the bill. But many online retailers, even those with locations in Virginia, forgo adding the tax, leaving it up to the customer to report the taxes to the state.... 'This is a massive loophole that, if closed, would go a long way toward relieving the state and localities of the revenue shortfall they are experiencing.' A bill approved by the Senate and now in the House of Delegates would require online retailers with a physical presence in Virginia to collect the tax and pay it to the state for sales in the Commonwealth, something business owners like Puckett and trade groups like the Retail Merchants Association support."
Progressive Point: Virginia lawmakers deserve kudos for advancing legislation to reform an egregious tax loophole that will put national retailers such as Amazon on an even playing field with Virginia's small businesses. Unfortunately, the progress stops there. Instead of focusing on helping Virginia's small businesses and working families, our legislators are often protecting pet tax loopholes and giveaways that amount to over $12 billion a year. Representatives talk a good game about reforming loopholes and making our tax code more fair, but when the rubber meets the road, they're still protecting big corporate tax breaks. Getting rid of corporate tax giveaways is a matter of fairness, and it's time that big business pays their fair share.
Legislators on both sides of the aisle agree there must be more accountability in our tax code and they must remain committed to creating a level playing field. It's time Virginia's lawmakers prioritize their constituents over big corporate interests and put an end to the big business tax breaks.
Get the Facts:
- Virginia lost $12.5 billion in revenue in 2008 through 187 different tax credits and giveaways that receive little-to-no scrutiny and accountability. (JLARC) This included coal companies receiving $31 million in tax breaks designed to slow layoffs in the industry. Instead, unemployment increased even more quickly than anticipated.
- "The report showed that only 20 of those [tax credits and giveaways] include reporting and evaluation of their cost and effectiveness, while 131 receive no regular oversight." (Richmond Times Dispatch, January 25, 2012)
- Better Choices for Virginia's recently released agenda highlighted four loopholes specifically:
- HB1030: The variety of accounting gimmicks that allowed 64% of Virginia corporations to have no tax liability
- HB1267: A loophole in our tax code that allows corporations to ship profits out of state to avoid taxes
- SB597: The "Amazon Loophole" that gives big online retailers an unfair advantage over Virginia brick-and-mortar businesses
- HB145: A tax break for people who buy yachts