Richmond stores fight to keep "Dealer Discount"

By Andy Jenks - bio | email

Posted by Terry Alexander - email

RICHMOND, VA (WWBT) - Local shop owners are asking state lawmakers to let them keep the "dealer discount."

When you go shopping, you pay sales tax. The shops, then submit that tax to the state. In exchange for doing that, the shops get a small kickback. But now the state, is threatening to take it away.

It's called the dealer discount and it amounts to about half a penny on every dollar that a business takes in.

At the Roadrunner Running store, that adds up to about 15-hundred dollars a year.

"The discount rate doesn't affect one segment of business, it affects every person in business." said Thom Suddeth of the Roadrunner Running Store.

In response to a multi-billion dollar budget gap, Governor Tim Kaine is proposing to repeal the dealer discount, in a move that would generate about 64 million dollars for the state.

Retailers say the fear is once it's gone, it's never coming back.

"Even if they balance the budget next year, and they all of a sudden have a surplus, do you actually think in reality, they're gonna take that away? No. We'll never see our discount back," said Suddeth.

Without even that small amount of money, retailers say the tough economy, will get even tougher. The cost of goods, may have to rise, to make up the difference.

It's why local shop owners are lobbying state lawmakers, to get them to consider other options, like taxing online sales from internet retailers.

The senate finance committee is scheduled to debate the dealer discount early next week. But its ultimate fate depends on whether Governor Kaine's budget proposal is passed in its current form.

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