Roanoke leaders talk to Kaine about online sales tax, Postal Service

The Roanoke Valley’s top economic concerns include taxes on Internet sales, the future of its U.S. Postal Service processing and distribution center and the stalled idea of an intermodal rail yard in Montgomery County, area business and civic leaders told Sen. Tim Kaine on Wednesday.

Kaine had some good news for the group that gathered for an informal briefing at the Roanoke Regional Chamber of Commerce: legislation to make it easier to collect state and local sales taxes on Internet transactions is likely to be enacted.

“We’ve got to level the playing field,” he said. Owners of bricks-and-mortar stores have to pay sales tax — and are easy to find when they don’t. Internet retailers, too, are supposed to pay and gain a big competitive advantage when they don’t.

There’s now technology that makes it simpler to collect sales taxes on Internet transactions and send them to the states and local governments that are owed, he said.

Kaine said there’s an extra benefit for Virginia if the legislation is enacted. Gov. Bob McDonnell’s transportation funding compromise says sales taxes collected as a result of a federal law on Internet business would go for transportation. Kaine said that could amount to $300 million a year or more.

Roanoke City Manager Chris Morrill said the issue of tax collection on Internet sales is particularly important downtown, where retailers play a vital role in its development. It hurts the city if they’re at a disadvantage when competing against online firms.

Joyce Waugh, chamber president and chief executive officer, said she’s still worried about the future of the postal service processing and distribution center in Roanoke.

The center escaped a round of cuts nearly a year ago, but if the postal service decided to axe it, the region’s large payroll-processing and other mail-dependent companies might need to look elsewhere to run their businesses, she said.

Kaine said he would push to keep the center here. He said he would argue for the center’s importance to southwest Virginia businesses but also wanted to address an unusual pension-funding obligation that is forcing the Postal Service to consider a series of deep spending cuts.

Former state senator Granger Macfarlane asked Kaine to help rekindle the intermodal rail yard idea by lobbying the governor’s office.

Kaine, joking that he still had scar tissue from the long legal battle over the yard, said the real issue for that yard was whether there was still real demand for it.

“I can’t create business for it,” he said. But he said he would be happy to do what he could.

He also said he would see if Amtrak could help with funding for a new platform and ticket office for the passenger rail service now slated to begin in 2015. He said he’d also ask about financial help to strengthen the culvert over which the passenger rail tracks are to run through part of the city.

Kaine told the group that he believes the Senate’s comprehensive immigration reform bills, which he thinks are likely to pass, will help with key business concerns about recruiting high-tech employees from abroad or from among the thousands of foreign students at U.S. universities.

He said he’s also optimistic that both the Senate and the House of Representatives have budget bills pending.

Even though the bills are different, Kaine thinks there’s a good chance that both bodies can eventually agree on targeted spending cuts to replace the across-the-board cuts that have hit so many programs — including the chamber’s own Small Business Development Center, which uses matching funds from Washington to help small businesses solve their problems.

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