Get Ready! Virginia Sales and Use Tax Changes
Moderator: Clare Dunn
Office of Customer Services
Presenter: Lee Mikelson
Director, Business & Analytic Services Division
House Bill 2313
Effective July 1, 2013
0.3 % increase Statewide
0.7 % increase Northern Virginia and Hampton Roads
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Retail Sales and Use TaxGeneral State Sales & Use Tax Rate 4.3%Local State Sales & Use Tax Rate 1.0%Total 5.3%
Vending Machine Sales and Use Tax General State Sales & Use Tax Rate 5.3%Local State Sales & Use Tax Rate 1.0%Total 6.3%
Retail Qualifying Food SalesState Qualifying Food Sales Tax Rate 1.5%Local State Sales & Use Tax Rate 1.0%Total 2.5%
Statewide Increase0.3%
Regional Increase0.7%
NO CHANGEState Qualifying Food Sales Tax Rate 1.5%Local State Sales & Use Tax Rate 1.0%Northern VA and Hampton Roads Regions Total Tax 2.5%
General State Sales & Use Tax Rate
4.3%Local State Sales & Use Tax Rate
1.0%Regional Sales & Use Tax Rate
.7%Northern VA and Hampton Roads Regions Total Tax
6.0%
General State Sales & Use Tax Rate
5.3%Local State Sales & Use Tax Rate
1.0%Regional Sales & Use Tax Rate
.7%Northern VA and Hampton Roads Regions Total Tax
7.0%
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Chesapeake City Isle of Wight County Poquoson City Surry County*
Franklin City James City County Portsmouth City Virginia Beach City
Gloucester County * Newport News City Southampton County Williamsburg City
Hampton City Norfolk City Suffolk City York County
New Regional Sales & Use Tax
Alexandria City Fairfax County Manassas City
Arlington County Falls Church City Manassas Park City
Fairfax City Loudoun County Prince William County
Northern VirginiaRegion
Hampton RoadsRegion
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* Counties not subject to the regional retail sales and use tax as originally presented in the webinar. While both counties are members of the Planning District 23 Commission that is impacted by the additional tax, neither county is located within the planning district. See Virginia Tax Bulletin VTB 13-8 .
Revised Forms
Form ST-9 for in-state sales
Form ST-8 for out-of-state use
Form ST-7 for business consumer use
Form VM-2 for vending machine sales
Form ST-6 for direct payment permits
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Sourcing
What is a locality?
What does sourcing mean?
What is an in-state sale?
What is an out-of-state sale?
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What is a Locality?
• Cities are independent of counties
• 133 cities and counties as of July 1, 2013
• Cities + Counties = Localities
• Each locality has a unique FIPS code
• Only cities and counties may impose local sales and use tax
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What does sourcing mean?
• Every sale must be assigned, or sourced, to a Virginia locality.
• The 1% local sales and use tax is distributed to the sourced locality.
Sourcing depends on:
• In-state sale
or
• Out-of-state sale
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What is an in-state sale?
• The seller/dealer has physical presence in Virginia, and
• The purchaser is located in Virginia
In-state Sales Sourcing Rule
Source to the locality in which your business is located.
• If located in the Northern Virginia or Hampton Roads regions, charge the additional regional tax.
• If NOT located in the Northern Virginia or Hampton Roads regions, do not charge the additional regional tax.
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What is an out-of-state sale?
• The dealer either has no physical presence in Virginia, or
• The dealer has physical presence in Virginia but has sales originating outside of Virginia
• The purchaser is located in Virginia
Out-of-state Sales Sourcing Rule
Source to the locality where the item is being delivered.
• If delivering in the Northern Virginia or Hampton Roads regions, charge the additional regional tax .
• If NOT delivering in the Northern Virginia or Hampton Roads regions, do not charge the additional regional tax.
Sourcing 101
In-state Dealers ST-9 Filers
Tax rate is determined by the dealer’s business location (point of sale)
FORM TYPE APPLICATION OF TAX RATE
Out-of-State ST-8 Filers
Tax rate is determined by the dealer’s destination where the item is shipped (point of delivery)
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Use our FIPS Code Lookup Tool to determine:
• Where your business location is, or
• The locality of an address you are mailing to
Let’s take a look at the tool!
Reporting Requirements
Single-Locality Filer
Consolidated Filer
Non-Fixed Filer
93%
2%
5%
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Form ST-8 Out-of-State Dealers
Form ST-9 In-state Dealers
Contracts – General Rule
• Before April 3, 2013 – Delivered September 30, 2013
• Entitled to Request Refund
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Bona Fide Real Estate Construction Contracts
• Contract entered into before April 3, 2013
• Must have finished plans and specifications
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Tangible Personal Property (installment sales/layaway purchase)
• Before April 3, 2013 – Redeemed by September 30, 2013
• Entitled to Request Refund
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Leases
• Lease/rental agreement entered into before April 3, 2013
• Leased property must be delivered to lessee by September 30, 2013