McDonnell and Amazon reach a tax deal

RICHMOND, VA (WWBT) - We're going to have to start paying taxes on our Amazon purchases.

Governor McDonnell struck a big deal Wednesday with the massive Internet retailer.

The debate began after the governor announced plans to build two Amazon distribution centers in Dinwiddie and Chesterfield.

The projects will lead to around 1,000 jobs.

But local retailers complained because Internet companies like Amazon are not required to charge state sales tax like they are.

The Virginia Retail Federation and others argued that once Amazon set up shop here, they too should start collecting sales tax.

Initially the governor resisted the calls to begin collecting the tax, but bills moving forward in the general assembly to force the collection started to gain steam.

Instead of waiting to see how those bills turned out, the governor announced his support of the Senate version of the bill, one Amazon and local retailers support.

The news is good for state coffers, it could mean an additional $24 million to the general fund.

It won't be so good for consumers who are used to shopping online without that additional 5% surcharge.

The bill still needs to pass the House of Representatives, but is expected to pass without a problem.

Copyright 2012 WWBT NBC12.  All rights reserved.