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West Virginia and Online Sales Tax Legislation

  • Mar 1, 2013 | Gail Cole

 West Virginia Considers Amazon Tax.

H.R. 684, or the Marketplace Fairness Act of 2013, was introduced to the House on February 14, 2013. On the same day S. 336, "a bill to restore States' sovereign rights to enforce State and local sales and use tax laws, and for other purposes," was introduced in the Senate. Both are in committee, awaiting further action.

Marketplace Fairness has both supporters and detractors, and at this point, one can only guess if it will survive to become law. Yet increasingly, states are taking the matter into their own hands. Some, like Massachusetts and Tennessee, have entered into agreements with Amazon.com, the world's largest online retailer. Others, like Georgia, have passed new legislation requiring Amazon to collect and remit sales tax. The latest consider such action is West Virginia.

Governor Earl Ray Tomblin (D) has proposed legislation that would require online retailers with facilities in West Virginia to collect and remit the state's sales tax on purchases shipped to West Virginia addresses.

Proposed Legislation

A note at the end of West Virginia HB 2754 succinctly explains:

"The purpose of this bill is to require certain retailers located out of state to collect and remit use tax as provided by West Virginia Code §11-15A-6. Those certain retailers are related to persons and entities in the state which perform services related to the tangible personal property or services sold by the retailer."

Streamlined Sales Tax

West Virginia has been a full member of Streamlined Sales Tax (SST) since 2005. The mission of SST is to "simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance." The Streamlined Sales Tax Governing Board supports federal legislation that would allow "out-of-state retailers without a physical presence in a state to collect that state's sales or use tax."

To date, 1,866 businesses have registered with the Streamlined Sales and Use Tax Agreement (SSUTA). Those sellers "must collect and remit sales and use taxes for all taxable sales into the member states, and those chosen associate member states." Georgia's Deputy Revenue Secretary Mark Muchow has said that tax revenue generated by SSUTA "has yielded $4 million to $5 million for West Virginia annually." Even more tax revenue could be gained if West Virginia collects tax from all remote sellers -- especially such a large one as Amazon.  (Businessweek).

Governor Tomblin's measure does not seek to collect sales tax from non-streamlined businesses that do not have nexus in West Virginia. Rather, it would require businesses with a physical presence in the state, such as Amazon, to collect and remit sales tax on sales to West Virginia residents. Amazon has several fulfillment centers in West Virginia, and employs over 1,000 West Virginians.

HB 2754 was introduced to the House Finance Committee on February 27, 2013.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.