TechBits package

Sen. Frank Wagner's bill would close a loophole that Internet merchants use to avoid collecting Virginia's 5 percent sales tax.

Supporters say it would boost Virginia's treasury by hundreds of millions of dollars annually merely by collecting taxes already on the books. They said it would also create a level playing field for traditional "brick-and-mortar" stores.

Five states — Kentucky, Kansas, New York, North Dakota and Washington — already have similar laws in effect and nine others have agreements or laws about to take effect to collect online retailing taxes.

Neither Amazon nor any other Internet retailer spoke against the bill.

The loophole is a remnant from the late 1990s and the last decade when governments were trying to nurture and incubate online commerce, then in its infancy. Now, Internet sales and commercial transactions have put many traditional retailing, entertainment and financial services companies in their graves.