'Net losses: Gov, critics talk Internet taxes

Virginia Governor Mark Warner supports the efforts of 40 U.S. states to create an agreement– the streamlined sales-tax project [SSTP]– designed to increase the collection of sales and use taxes on Internet-based retail sales nationally.

The reason: "You either pay one way, or you pay another way."

"I don't think there ought to be an unfair benefit for an Internet-based store over a bricks-and-mortar store," Warner said on a spring visit to Waynesboro to talk about legislative actions in the 2005 General Assembly. Legislators passed up the chance to have the Commonwealth jump headfirst into the SSTP game.

"Right now, we don't know what amount of revenue is lost, but there have been estimates that it runs into the multiple billions of dollars," said Warner, who's rumored to be interested in a possible run at the Democratic Party presidential nomination in 2008.

A Waynesboro Democrat questions whether the effort to involve Virginia in the streamlined sales-tax project might cost the state billions in future economic development.

"Internet retail is an important economic-development tool for small towns and rural areas," says Stacey Strawn Evans, co-owner of Blue Moon Galleries, a Waynesboro Web retailer.

"I can tell you that we wouldn't be here in Waynesboro employing people and purchasing a building in an enterprise zone if it weren't for our Internet sales," says Strawn Evans. "Quite a few buildings downtown would be empty if it weren't for their Internet retail base.

"I don't understand this effort to put a crimp in a segment of the economy that's responsible for so much of the economic growth in the past several years," Straw Evans says.

Warner says it's simple. There have been estimates that the tax-revenue loss from uncollected sales taxes on Internet sales is in the area of $200 -$600 million annually in Virginia alone, the governor says.

<img src="/images/issue0222/hotseat-warner.jpg"><br>Warner: "You either pay one way, or you pay another way."<br>FILE< PHOTO BY JEN FARIELLO