Transaction Tax Talk

Hot on the heels of New Mexico, the Virginia Senate has introduced a so-called "Amazon" bill. S.B. 660, as introduced in the Virginia Senate on January 21, 2010, would provide for a presumption that a dealer is soliciting or transacting business in Virginia if the dealer enters into an agreement with a Virginia resident under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet site or otherwise, to the dealer. Like the New Mexico bill the presumption can be rebutted by proof that the resident with whom the dealer has an agreement did not engage in any solicitation in Virginia on behalf of the dealer that would satisfy the nexus requirements of the U.S. Constitution. The presumption would also only be applicable if the cumulative gross receipts from sales by the dealer to purchasers in Virginia who are referred to the dealer by all residents with whom the dealer has this type of agreement are in excess of $10,000 during the preceding four quarterly periods. A dealer meeting the requirements would be required to register for retail sales and use tax purposes.

Update 2/10/2010: S.B. 660 was approved by the Senate Finance Committee 14-1 today. It now moves to the full Senate for vote.

Update 2/16/2010: S.B. 660 was approved by the Senate on February 16th.

Update 3/1/2010: S.B. 660 was tabled by the Virginia House of Delegates Committee on Finance on February 24, 2010.