Proposed new Virginia ‘tech tax’ sparks backlash from business community

By SARAH RANKIN
Associated Press

RICHMOND, Va. (AP) — Trade associations representing hundreds of companies that do business in Virginia have come out swinging against a proposal to expand the sales tax to cover digital goods. Republican Gov. Glenn Youngkin raised the idea in December, packaged with other tax cuts, and Democrats endorsed it in their proposed versions of the next two-year budget. If approved, the new tax would apply to purchases like streaming subscriptions, cloud storage and online downloads. The Senate went beyond the House of Delegates in also applying it to business-to-business transactions. The business community is warning it will be hard on start-ups and lead to higher costs for customers. Democrats say it simply brings the tax code into the digital age.