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Get Ready! Virginia Sales and Use Tax Changes

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

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Get Ready! Virginia Sales and Use Tax Changes

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  1. Get Ready! Virginia Sales and Use Tax Changes Moderator: Clare Dunn Office of Customer Services Presenter: Lee Mikelson Director, Business & Analytic Services Division

  2. House Bill 2313 Effective July 1, 2013 0.3 % increase Statewide 0.7 % increase Northern Virginia and Hampton Roads

  3. Statewide Increase 0.3% Regional Increase 0.7% Retail Sales and Use Tax General State Sales & Use Tax Rate 4.3% Local State Sales & Use Tax Rate 1.0% Total 5.3% 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% 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% 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% Retail Qualifying Food Sales State Qualifying Food Sales Tax Rate 1.5% Local State Sales & Use Tax Rate 1.0% Total 2.5% NO CHANGE State 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%

  4. New Regional Sales & Use Tax Northern VirginiaRegion Hampton Roads Region * 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 .

  5. 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

  6. Sourcing What is a locality? What does sourcing mean? What is an in-state sale? What is an out-of-state sale?

  7. 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

  8. 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

  9. 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.

  10. 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.

  11. Sourcing 101 #1 #2

  12. 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!

  13. Remember – details and examples are provided in the HB 2313 Guidelines

  14. Reporting Requirements • Form ST-9 In-state Dealers • 93% • Single-Locality Filer • 2% • Consolidated Filer • 5% • Non-Fixed Filer • Form ST-8 Out-of-State Dealers

  15. Transitional Rules

  16. Contracts – General Rule • Before April 3, 2013 – Delivered September 30, 2013 • Entitled to Request Refund

  17. Bona Fide Real Estate Construction Contracts • Contract entered into before April 3, 2013 • Must have finished plans and specifications

  18. Tangible Personal Property (installment sales/layaway purchase) • Before April 3, 2013 – Redeemed by September 30, 2013 • Entitled to Request Refund

  19. Leases • Lease/rental agreement entered into before April 3, 2013 • Leased property must be delivered to lessee by September 30, 2013

  20. Final Questions

  21. Get Ready! Virginia Sales and Use Tax Changes Live Chat: http://www.tax.virginia.gov/ Telephone: (804) 367-8037

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