Online sales tax could be coming to your favorite online store

Posted at 6:44 PM, Apr 23, 2013

RICHMOND, Va. (WTVR) -- The cost to shop online may soon increase if Congress passes and President Obama signs the Marketplace Fairness Act.

The bill that would compel online stores to charge sales tax to customers.

Presently, a person is only charged the sales tax if the store they shop at online has a physical, retail store in the same state.

In other words, if you shop at, you are charged the sales tax because Best Buy has a store in Virginia.

However, if you shop online at a Christmas shop in New York that has no corresponding shop in Virginia, no sales tax is applied. Virginians are supposed to declare that on their tax returns, but few people do.

That tax loophole would be reversed under the Marketplace Fairness Act, but companies that have less than $1 million annually in sales would be exempt.

"I think it is a good thing," Michelle Moore, owner of Carytown's Artisan's Shoppe.

Moore says her only competitor is the internet and many of those shops do not have to collect sales tax for purchases, making items cheaper online.

"We have to charge. I think they should as well," Moore said.

Ebay is fighting against the bill, while Amazon has indicated support. President Obama is expected to sign it if the bill passes Congress.

Local business owners are not the only ones rooting for the change in tax code, state legislatures are as well.

Gov. Bob McDonnell has already penciled in the expected revenue into his transportation plan.

According to spokesman Tucker Martin, Virginia will get over $250 million in new tax revenue if the Marketplace Fairness Act passes.

The money would be allocated in the following ways:

Statewide Transportation:

  • FY 2014 - $145.9m
  • FY 2015 - $165.3m
  • FY 2016 - $171.9m
  • FY 2017 - $178.5m
  • FY 2018 - $184.5m

 Public Education:

  • FY 2014 - $59.3m
  • FY 2015 - $67.3m
  • FY 2016 - $70.0m
  • FY 2017 - $72.8m
  • FY 2018 - $75.3m

 Local Option:

  • FY 2014 - $23.7m
  • FY 2015 - $26.9m
  • FY 2016 - $28.0m
  • FY 2017 - $29.1m
  • FY 2018 - $30.1m

 Local Transportation:

  • FY 2014 - $23.7m
  • FY 2015 - $26.9m
  • FY 2016 - $28.0m
  • FY 2017 - $29.1m
  • FY 2018 - $30.1m