Bill Text: VA SB14 | 2024 | Regular Session | Enrolled
Bill Title: Sales and use tax, local; additional tax authorized in counties & cities to support schools.
Spectrum: Partisan Bill (Democrat 9-0)
Status: (Vetoed) 2024-04-17 - Senate sustained Governor's veto [SB14 Detail]
Download: Virginia-2024-SB14-Enrolled.html
Be it enacted by the General Assembly of Virginia:
1. That §§58.1-602, 58.1-605, 58.1-605.1, and 58.1-606.1 of the Code of Virginia are amended and reenacted as follows:
§58.1-602. Definitions.
As used in this chapter, unless the context clearly shows otherwise:
"Accommodations" means any room or rooms, lodgings, or accommodations in any hotel, motel, inn, tourist camp, tourist cabin, camping grounds, club, short-term rental, or any other place in which rooms, lodging, space, or accommodations are regularly furnished to transients for a consideration. "Accommodations" does not include rooms or space offered by a person in the business of providing conference rooms, meeting space, or event space if the person does not also offer rooms available for overnight sleeping.
"Accommodations fee" means the room charge less the discount room charge, if any, provided that the accommodations fee shall not be less than $0.
"Accommodations intermediary" means any person other than an accommodations provider that (i) facilitates the sale of an accommodation and (ii) either (a) charges a room charge to the customer, and charges an accommodations fee to the customer, which fee it retains as compensation for facilitating the sale; (b) collects a room charge from the customer; or (c) charges a fee, other than an accommodations fee, to the customer, which fee it retains as compensation for facilitating the sale. For purposes of this definition, "facilitates the sale" includes brokering, coordinating, or in any other way arranging for the purchase of the right to use accommodations via a transaction directly, including via one or more payment processors, between a customer and an accommodations provider.
"Accommodations intermediary" does not include a person:
1. If the accommodations are provided by an accommodations provider operating under a trademark, trade name, or service mark belonging to such person;
2. Who facilitates the sale of an accommodation if (i) the price paid by the customer to such person is equal to the price paid by such person to the accommodations provider for the use of the accommodations and (ii) the only compensation received by such person for facilitating the sale of the accommodation is a commission paid from the accommodations provider to such person; or
3. Who is licensed as a real estate licensee pursuant to Article 1 (§54.1-2100 et seq.) of Chapter 21 of Title 54.1, when acting within the scope of such license.
"Accommodations provider" means any person that furnishes accommodations to the general public for compensation. The term "furnishes" includes the sale of use or possession or the sale of the right to use or possess.
"Advertising" means the planning, creating, or placing of advertising in newspapers, magazines, billboards, broadcasting and other media, including, without limitation, the providing of concept, writing, graphic design, mechanical art, photography and production supervision. Any person providing advertising as defined in this section shall be deemed to be the user or consumer of all tangible personal property purchased for use in such advertising.
"Affiliate" means the same as such term is defined in §58.1-439.18.
"Amplification, transmission, distribution, and network equipment" means production, distribution, and other equipment used to provide Internet-access services, such as computer and communications equipment and software used for storing, processing, and retrieving end-user subscribers' requests. A "network" includes modems, fiber optic cables, coaxial cables, radio equipment, routing equipment, switching equipment, a cable modem termination system, associated software, transmitters, power equipment, storage devices, servers, multiplexers, and antennas, which network is used to provide Internet service, regardless of whether the provider of such service is also a telephone common carrier or whether such network is also used to provide services other than Internet services.
"Business" includes any activity engaged in by any person, or caused to be engaged in by him, with the object of gain, benefit or advantage, either directly or indirectly.
"Cost price" means the actual cost of an item or article of tangible personal property computed in the same manner as the sales price as defined in this section without any deductions therefrom on account of the cost of materials used, labor, or service costs, transportation charges, or any expenses whatsoever.
"Custom program" means a computer program that is specifically designed and developed only for one customer. The combining of two or more prewritten programs does not constitute a custom computer program. A prewritten program that is modified to any degree remains a prewritten program and does not become custom.
"Discount room charge" means the full amount charged by the accommodations provider to the accommodations intermediary, or an affiliate thereof, for furnishing the accommodations.
"Distribution" means the transfer or delivery of tangible personal property for use, consumption, or storage by the distributee, and the use, consumption, or storage of tangible personal property by a person that has processed, manufactured, refined, or converted such property, but does not include the transfer or delivery of tangible personal property for resale or any use, consumption, or storage otherwise exempt under this chapter.
"Gross proceeds" means the charges made or voluntary contributions received for the lease or rental of tangible personal property or for furnishing services, computed with the same deductions, where applicable, as for sales price as defined in this section over the term of the lease, rental, service, or use, but not less frequently than monthly. "Gross proceeds" does not include finance charges, carrying charges, service charges, or interest from credit extended on the lease or rental of tangible personal property under conditional lease or rental contracts or other conditional contracts providing for the deferred payments of the lease or rental price.
"Gross sales" means the sum total of all retail sales of tangible personal property or services as defined in this chapter, without any deduction, except as provided in this chapter. "Gross sales" does not include the federal retailers' excise tax or the federal diesel fuel excise tax imposed in §4091 of the Internal Revenue Code if the excise tax is billed to the purchaser separately from the selling price of the article, or the Virginia retail sales or use tax, or any sales or use tax imposed by any county or city under §58.1-605 or 58.1-606.
"Import" and "imported" are words applicable to tangible personal property imported into the Commonwealth from other states as well as from foreign countries, and "export" and "exported" are words applicable to tangible personal property exported from the Commonwealth to other states as well as to foreign countries.
"In this Commonwealth" or "in the Commonwealth" means within the limits of the Commonwealth of Virginia and includes all territory within these limits owned by or ceded to the United States of America.
"Integrated process," when used in relation to semiconductor manufacturing, means a process that begins with the research or development of semiconductor products, equipment, or processes, includes the handling and storage of raw materials at a plant site, and continues to the point that the product is packaged for final sale and either shipped or conveyed to a warehouse. Without limiting the foregoing, any semiconductor equipment, fuel, power, energy, supplies, or other tangible personal property shall be deemed used as part of the integrated process if its use contributes, before, during, or after production, to higher product quality, production yields, or process efficiencies. Except as otherwise provided by law, "integrated process" does not mean general maintenance or administration.
"Internet" means, collectively, the myriad of computer and telecommunications facilities, which comprise the interconnected worldwide network of computer networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor to such protocol, to communicate information of all kinds by wire or radio.
"Internet service" means a service that enables users to access content, information, and other services offered over the Internet.
"Lease or rental" means the leasing or renting of tangible personal property and the possession or use thereof by the lessee or renter for a consideration, without transfer of the title to such property.
"Manufacturing, processing, refining, or conversion" includes the production line of the plant starting with the handling and storage of raw materials at the plant site and continuing through the last step of production where the product is finished or completed for sale and conveyed to a warehouse at the production site, and also includes equipment and supplies used for production line testing and quality control. "Manufacturing" also includes the necessary ancillary activities of newspaper and magazine printing when such activities are performed by the publisher of any newspaper or magazine for sale daily or regularly at average intervals not exceeding three months.
The determination of whether any manufacturing, mining, processing, refining or conversion activity is industrial in nature shall be made without regard to plant size, existence or size of finished product inventory, degree of mechanization, amount of capital investment, number of employees or other factors relating principally to the size of the business. Further, "industrial in nature" includes, but is not limited to, those businesses classified in codes 10 through 14 and 20 through 39 published in the Standard Industrial Classification Manual for 1972 and any supplements issued thereafter.
"Modular building" means, but is not limited to, single and multifamily houses, apartment units, commercial buildings, and permanent additions thereof, comprised of one or more sections that are intended to become real property, primarily constructed at a location other than the permanent site, built to comply with the Virginia Industrialized Building Safety Law (§36-70 et seq.) as regulated by the Virginia Department of Housing and Community Development, and shipped with most permanent components in place to the site of final assembly. For purposes of this chapter, "modular building" does not include a mobile office as defined in § 58.1-2401 or any manufactured building subject to and certified under the provisions of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. §5401 et seq.).
"Modular building manufacturer" means a person that owns or operates a manufacturing facility and is engaged in the fabrication, construction and assembling of building supplies and materials into modular buildings, as defined in this section, at a location other than at the site where the modular building will be assembled on the permanent foundation and may or may not be engaged in the process of affixing the modules to the foundation at the permanent site.
"Modular building retailer" means any person that purchases or acquires a modular building from a modular building manufacturer, or from another person, for subsequent sale to a customer residing within or outside of the Commonwealth, with or without installation of the modular building to the foundation at the permanent site.
"Motor vehicle" means a "motor vehicle" as defined in §58.1-2401, taxable under the provisions of the Virginia Motor Vehicles Sales and Use Tax Act (§58.1-2400 et seq.) and upon the sale of which all applicable motor vehicle sales and use taxes have been paid.
"Occasional sale" means a sale of tangible personal property not held or used by a seller in the course of an activity for which it is required to hold a certificate of registration, including the sale or exchange of all or substantially all the assets of any business and the reorganization or liquidation of any business, provided that such sale or exchange is not one of a series of sales and exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration.
"Open video system" means an open video system authorized pursuant to 47 U.S.C. §573 and, for purposes of this chapter only, also includes Internet service regardless of whether the provider of such service is also a telephone common carrier.
"Person" includes any individual, firm, copartnership, cooperative, nonprofit membership corporation, joint venture, association, corporation, estate, trust, business trust, trustee in bankruptcy, receiver, auctioneer, syndicate, assignee, club, society, or other group or combination acting as a unit, body politic or political subdivision, whether public or private, or quasi-public, and the plural of "person" means the same as the singular.
"Prewritten program" means a computer program that is prepared, held or existing for general or repeated sale or lease, including a computer program developed for in-house use and subsequently sold or leased to unrelated third parties.
"Qualifying locality" means Charlotte County,
Gloucester County, Halifax County, Henry County, Mecklenburg County,
Northampton County, Patrick County, Pittsylvania County, or the City of
Danville.
"Qualifying town" means any incorporated town constituting and operating a special school district separate from the school district operated by the county within which such incorporated town lies.
"Railroad rolling stock" means locomotives, of whatever motive power, autocars, railroad cars of every kind and description, and all other equipment determined by the Tax Commissioner to constitute railroad rolling stock.
"Remote seller" means any dealer deemed to have sufficient activity within the Commonwealth to require registration under § 58.1-613 under the criteria specified in subdivision C 10 or 11 of §58.1-612 or any software provider acting on behalf of such dealer.
"Retail sale" or a "sale at retail" means a sale to any person for any purpose other than for resale in the form of tangible personal property or services taxable under this chapter, and shall include any such transaction as the Tax Commissioner upon investigation finds to be in lieu of a sale. All sales for resale must be made in strict compliance with regulations applicable to this chapter. Any dealer making a sale for resale which is not in strict compliance with such regulations shall be personally liable for payment of the tax.
The terms "retail sale" and a "sale at retail" specifically include the following: (i) the sale or charges for any accommodations furnished to transients for less than 90 continuous days; (ii) sales of tangible personal property to persons for resale when because of the operation of the business, or its very nature, or the lack of a place of business in which to display a certificate of registration, or the lack of a place of business in which to keep records, or the lack of adequate records, or because such persons are minors or transients, or because such persons are engaged in essentially service businesses, or for any other reason there is likelihood that the Commonwealth will lose tax funds due to the difficulty of policing such business operations; (iii) the separately stated charge made for automotive refinish repair materials that are permanently applied to or affixed to a motor vehicle during its repair; and (iv) the separately stated charge for equipment available for lease or purchase by a provider of satellite television programming to the customer of such programming. Equipment sold to a provider of satellite television programming for subsequent lease or purchase by the customer of such programming shall be deemed a sale for resale. The Tax Commissioner is authorized to promulgate regulations requiring vendors of or sellers to such persons to collect the tax imposed by this chapter on the cost price of such tangible personal property to such persons and may refuse to issue certificates of registration to such persons. The terms "retail sale" and a "sale at retail" also specifically include the separately stated charge made for supplies used during automotive repairs whether or not there is transfer of title or possession of the supplies and whether or not the supplies are attached to the automobile. The purchase of such supplies by an automotive repairer for sale to the customer of such repair services shall be deemed a sale for resale.
The term "transient" does not include a purchaser of camping memberships, time-shares, condominiums, or other similar contracts or interests that permit the use of, or constitute an interest in, real estate, however created or sold and whether registered with the Commonwealth or not. Further, a purchaser of a right or license which entitles the purchaser to use the amenities and facilities of a specific real estate project on an ongoing basis throughout its term shall not be deemed a transient, provided, however, that the term or time period involved is for seven years or more.
The terms "retail sale" and "sale at retail" do not include a transfer of title to tangible personal property after its use as tools, tooling, machinery or equipment, including dies, molds, and patterns, if (i) at the time of purchase, the purchaser is obligated, under the terms of a written contract, to make the transfer and (ii) the transfer is made for the same or a greater consideration to the person for whom the purchaser manufactures goods.
"Retailer" means every person engaged in the business of making sales at retail, or for distribution, use, consumption, or storage to be used or consumed in the Commonwealth.
"Room charge" means the full retail price charged to the customer for the use of the accommodations before taxes. "Room charge" includes any fee charged to the customer and retained as compensation for facilitating the sale, whether described as an accommodations fee, facilitation fee, or any other name. The room charge shall be determined in accordance with 23VAC10-210-730 and the related rulings of the Department on the same.
"Sale" means any transfer of title or possession, or both, exchange, barter, lease or rental, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property and any rendition of a taxable service for a consideration, and includes the fabrication of tangible personal property for consumers who furnish, either directly or indirectly, the materials used in fabrication, and the furnishing, preparing, or serving for a consideration of any tangible personal property consumed on the premises of the person furnishing, preparing, or serving such tangible personal property. A transaction whereby the possession of property is transferred but the seller retains title as security for the payment of the price shall be deemed a sale.
"Sales price" means the total amount for which tangible personal property or services are sold, including any services that are a part of the sale, valued in money, whether paid in money or otherwise, and includes any amount for which credit is given to the purchaser, consumer, or lessee by the dealer, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, losses or any other expenses whatsoever. "Sales price" does not include (i) any cash discount allowed and taken; (ii) finance charges, carrying charges, service charges or interest from credit extended on sales of tangible personal property under conditional sale contracts or other conditional contracts providing for deferred payments of the purchase price; (iii) separately stated local property taxes collected; (iv) that portion of the amount paid by the purchaser as a discretionary gratuity added to the price of a meal; or (v) that portion of the amount paid by the purchaser as a mandatory gratuity or service charge added by a restaurant to the price of a meal, but only to the extent that such mandatory gratuity or service charge does not exceed 20 percent of the price of the meal. Where used articles are taken in trade, or in a series of trades as a credit or part payment on the sale of new or used articles, the tax levied by this chapter shall be paid on the net difference between the sales price of the new or used articles and the credit for the used articles.
"Semiconductor cleanrooms" means the integrated systems, fixtures, piping, partitions, flooring, lighting, equipment, and all other property used to reduce contamination or to control airflow, temperature, humidity, vibration, or other environmental conditions required for the integrated process of semiconductor manufacturing.
"Semiconductor equipment" means (i) machinery or tools or repair parts or replacements thereof; (ii) the related accessories, components, pedestals, bases, or foundations used in connection with the operation of the equipment, without regard to the proximity to the equipment, the method of attachment, or whether the equipment or accessories are affixed to the realty; (iii) semiconductor wafers and other property or supplies used to install, test, calibrate or recalibrate, characterize, condition, measure, or maintain the equipment and settings thereof; and (iv) equipment and supplies used for quality control testing of product, materials, equipment, or processes; or the measurement of equipment performance or production parameters regardless of where or when the quality control, testing, or measuring activity takes place, how the activity affects the operation of equipment, or whether the equipment and supplies come into contact with the product.
"Short-term rental" means the same as such term is defined in §15.2-983.
"Storage" means any keeping or retention of tangible personal property for use, consumption or distribution in the Commonwealth, or for any purpose other than sale at retail in the regular course of business.
"Tangible personal property" means personal property that may be seen, weighed, measured, felt, or touched, or is in any other manner perceptible to the senses. "Tangible personal property" does not include stocks, bonds, notes, insurance or other obligations or securities. "Tangible personal property" includes (i) telephone calling cards upon their initial sale, which shall be exempt from all other state and local utility taxes, and (ii) manufactured signs.
"Use" means the exercise of any right or power over tangible personal property incident to the ownership thereof, except that it does not include the sale at retail of that property in the regular course of business. "Use" does not include the exercise of any right or power, including use, distribution, or storage, over any tangible personal property sold to a nonresident donor for delivery outside of the Commonwealth to a nonresident recipient pursuant to an order placed by the donor from outside the Commonwealth via mail or telephone. "Use" does not include any sale determined to be a gift transaction, subject to tax under §58.1-604.6.
"Use tax" refers to the tax imposed upon the use, consumption, distribution, and storage as defined in this section.
"Used directly," when used in relation to manufacturing, processing, refining, or conversion, refers to those activities that are an integral part of the production of a product, including all steps of an integrated manufacturing or mining process, but not including ancillary activities such as general maintenance or administration. When used in relation to mining, "used directly" refers to the activities specified in this definition and, in addition, any reclamation activity of the land previously mined by the mining company required by state or federal law.
"Video programmer" means a person that provides video programming to end-user subscribers.
"Video programming" means video and/or information programming provided by or generally considered comparable to programming provided by a cable operator, including, but not limited to, Internet service.
§58.1-605. To what extent and under what conditions cities and counties may levy local sales taxes; collection thereof by Commonwealth and return of revenue to each city or county entitled thereto.
A. No county, city or town shall impose any local general sales or use tax or any local general retail sales or use tax except as authorized by this section or §58.1-605.1.
B. The council of any city and the governing body of any county may levy a general retail sales tax at the rate of one percent to provide revenue for the general fund of such city or county. Such tax shall be added to the rate of the state sales tax imposed by §§58.1-603 and 58.1-604 and shall be subject to all the provisions of this chapter and the rules and regulations published with respect thereto. No discount under §58.1-622 shall be allowed on a local sales tax.
C. 1. The council of any city and the governing body of any county desiring to impose a local sales tax under this section may do so by the adoption of an ordinance stating its purpose and referring to this section, and providing that such ordinance shall be effective on the first day of a month at least 60 days after its adoption. A certified copy of such ordinance shall be forwarded to the Tax Commissioner so that it will be received within five days after its adoption.
2. Prior to any change in the rate of any local sales and use tax, the Tax Commissioner shall provide remote sellers with at least 30 days' notice. Any change in the rate of any local sales and use tax shall only become effective on the first day of a calendar quarter. Failure to provide notice pursuant to this section shall require the Commonwealth and the locality to apply the preceding effective rate until 30 days after notification is provided.
D. Any local sales tax levied under this section shall be administered and collected by the Tax Commissioner in the same manner and subject to the same penalties as provided for the state sales tax.
E. All local sales tax moneys collected by the Tax Commissioner under this section shall be paid into the state treasury to the credit of a special fund which is hereby created on the Comptroller's books under the name "Collections of Local Sales Taxes." Such local sales tax moneys shall be credited to the account of each particular city or county levying a local sales tax under this section. The basis of such credit shall be the city or county in which the sales were made as shown by the records of the Department and certified by it monthly to the Comptroller, namely, the city or county of location of each place of business of every dealer paying the tax to the Commonwealth without regard to the city or county of possible use by the purchasers. If a dealer has any place of business located in more than one political subdivision by reason of the boundary line or lines passing through such place of business, the amount of sales tax paid by such a dealer with respect to such place of business shall be treated for the purposes of this section as follows: one-half shall be assignable to each political subdivision where two are involved, one-third where three are involved, and one-fourth where four are involved.
F. As soon as practicable after the local sales tax moneys have been paid into the state treasury in any month for the preceding month, the Comptroller shall draw his warrant on the Treasurer of Virginia in the proper amount in favor of each city or county entitled to the monthly return of its local sales tax moneys, and such payments shall be charged to the account of each such city or county under the special fund created by this section. If errors are made in any such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers, or to some other fact, the errors shall be corrected and adjustments made in the payments for the next two months as follows: one-half of the total adjustment shall be included in the payments for the next two months. In addition, the payment shall include a refund of amounts erroneously not paid to the city or county and not previously refunded during the three years preceding the discovery of the error. A correction and adjustment in payments described in this subsection due to the misallocation of funds by the dealer shall be made within three years of the date of the payment error.
G. Such payments to counties are subject to the qualification that in any county wherein is situated any incorporated town constituting a special school district and operated as a separate school district under a town school board of three members appointed by the town council, the county treasurer shall pay into the town treasury for general governmental purposes the proper proportionate amount received by him in the ratio that the school age population of such town bears to the school age population of the entire county. If the school age population of any town constituting a separate school district is increased by the annexation of territory since the last estimate of school age population provided by the Weldon Cooper Center for Public Service, such increase shall, for the purposes of this section, be added to the school age population of such town as shown by the last such estimate and a proper reduction made in the school age population of the county or counties from which the annexed territory was acquired.
H. One-half of such payments to counties are subject to the further qualification, other than as set out in subsection G, that in any county wherein is situated any incorporated town not constituting a separate special school district that has complied with its charter provisions providing for the election of its council and mayor for a period of at least four years immediately prior to the adoption of the sales tax ordinance, the county treasurer shall pay into the town treasury of each such town for general governmental purposes the proper proportionate amount received by him in the ratio that the school age population of each such town bears to the school age population of the entire county, based on the latest estimate provided by the Weldon Cooper Center for Public Service. The preceding requirement pertaining to the time interval between compliance with election provisions and adoption of the sales tax ordinance shall not apply to a tier-city. If the school age population of any such town not constituting a separate special school district is increased by the annexation of territory or otherwise since the last estimate of school age population provided by the Weldon Cooper Center for Public Service, such increase shall, for the purposes of this section, be added to the school age population of such town as shown by the last such estimate and a proper reduction made in the school age population of the county or counties from which the annexed territory was acquired.
I. Notwithstanding the provisions of subsection H, the board
of supervisors of a county may, in its discretion, appropriate funds to any
incorporated town not constituting a separate school district within such
county that has not complied with the provisions of its charter relating to the
elections of its council and mayor, an amount not to exceed the amount it
would have received from the tax imposed by this chapter if such election had
been held; however, Charlotte County, Gloucester County, Halifax County, Henry
County, Mecklenburg County, Northampton County, Patrick County, and
Pittsylvania County may appropriate any amount to any such incorporated town.
J. It is further provided that if any incorporated town which would otherwise be eligible to receive funds from the county treasurer under subsection G or H be located in a county that does not levy a general retail sales tax under the provisions of this law, such town may levy a general retail sales tax at the rate of one percent to provide revenue for the general fund of the town, subject to all the provisions of this section generally applicable to cities and counties. Any tax levied under the authority of this subsection shall in no case continue to be levied on or after the effective date of a county ordinance imposing a general retail sales tax in the county within which such town is located.
§58.1-605.1. Additional local sales tax; use of revenues for construction or renovation of schools.
A. 1. In addition to the sales tax authorized under §
58.1-605, a qualifying locality any county or city may levy a
general retail sales tax at a rate not to exceed one percent as determined by
its governing body to provide revenue solely for capital projects for the
construction or renovation of schools in serving each such
locality county or city. For the purposes of this section,
"capital projects" means construction, additions, renovations,
including retrofitting and enlarging public school buildings, infrastructure,
including technology infrastructure, and site acquisition for public school
buildings and facilities. Such tax shall be added to the rates of the state
and local sales tax imposed by this chapter and shall be subject to all the
provisions of this chapter and the rules and regulations published with respect
thereto. No discount under §58.1-622 shall be allowed on this local sales tax.
2. Any tax imposed pursuant to this section shall expire
(i) if the capital projects for the construction or renovation of schools are
to be financed by bonds or loans, on the date by which such bonds or loans
shall be repaid or (ii) if the capital projects for the construction or
renovation of schools are not to be financed by bonds or loans, on a date
chosen by the governing body and specified in any resolution passed pursuant to
the provisions of subdivision B 1. Such expiration date shall not be more than
20 years after the date of the resolution passed pursuant to the provisions of
subdivision B 1.
B. 1. This tax may be levied only if the tax is approved in a
referendum within the qualifying locality county or city held in
accordance with §24.2-684 and initiated by a resolution of the local governing
body. Such resolution shall state (i) if the capital projects for the
construction or renovation of schools are to be financed by bonds or loans, the
date by which such bonds or loans shall be repaid or (ii) if the capital
projects for the construction or renovation of schools are not to be financed
by bonds or loans, a specified date on which the sales tax shall expire
that revenues resulting from the imposition of this tax are to be used on
capital projects, and may state that such revenues resulting from the
imposition of this tax may be used for the debt service of such capital
projects.
2. The clerk of the circuit court shall publish notice of the
referendum in a newspaper of general circulation in the qualifying locality
county or city once a week for three consecutive weeks prior to the
election. The question on the ballot for the referendum shall include language
stating (i) that the revenues from the sales tax shall be used solely
for capital projects for the construction or renovation of schools and (ii)
the date on which the sales tax shall expire.
C. The governing body of the qualifying locality
county or city, if it elects to impose a local sales tax under this section
after approval at a referendum as provided in subsection B shall do so by the
adoption of an ordinance stating its purpose and referring to this section and
providing that such ordinance shall be effective on the first day of a month at
least 120 days after its adoption. Such ordinance shall state the date on
which the sales tax shall expire. A certified copy of such ordinance shall
be forwarded to the Tax Commissioner so that it will be received within five
days after its adoption.
D. Any local sales tax levied under this section shall be administered and collected by the Tax Commissioner in the same manner and subject to the same exemptions and penalties as provided for the state sales tax; however, the local sales tax levied under this section shall not be levied on food purchased for human consumption or essential personal hygiene products, as such terms are defined in §58.1-611.1. Any local sales tax imposed under this section shall be collected and distributed separately from any local general retail sales tax imposed under §58.1-605.
E. All local sales tax moneys collected by the Tax
Commissioner under this section shall be paid into the state treasury to the
credit of a special fund that is hereby created on the Comptroller's books for
each qualifying locality county or city under the name
"Collections of Additional Local Sales Taxes in ____ (INSERT NAME OF THE
QUALIFYING LOCALITY COUNTY OR CITY)." Each fund shall be
administered as provided in §58.1-605. A separate fund shall be created for
each qualifying locality county or city. Only local sales tax
moneys collected in that qualifying locality county or city shall
be deposited in that locality's county's or city's fund.
F. 1. As soon as practicable after the local sales tax
moneys have been paid into the state treasury in any month for the preceding
month, the Comptroller shall draw his warrant on the State Treasurer in the
proper amount in favor of each qualifying locality county or city,
and such payments shall be charged to the account of the qualifying locality
county or city under its special fund created by this section. If errors
are made in any such payment, or adjustments are otherwise necessary, whether
attributable to refunds to taxpayers or to some other fact, the errors shall be
corrected and adjustments made in the payments for the next two months as
follows: one-half of the total adjustment shall be included in the payment for
each of the next two months. In addition, the payment shall include a refund of
amounts erroneously not paid to each qualifying locality county or
city and not previously refunded during the three years preceding the
discovery of the error. A correction and adjustment in payments described in
this subsection due to the misallocation of funds by the dealer shall be made
within three years of the date of the payment error.
2. Any county that contains a qualifying town shall pay into the qualifying town's treasury the proper proportionate revenues received by such county from levying the tax authorized by this section in the ratio that the school age population of such town bears to the school age population of the entire county. Such payments to a qualifying town shall be made as soon as practicable after receipt of funds by the county each month pursuant to subdivision 1. A qualifying town receiving revenues pursuant to this subdivision shall use such revenues solely for school capital projects as provided in this section for counties and cities.
G. The revenues from this tax shall be used solely for capital
projects described in clauses (i) and (ii) for new construction or
major renovation of schools in serving the qualifying
locality county or city, including bond and loan financing costs
related to such construction or renovation capital projects.
Revenues from this tax may be used (i) for repayment of existing indebtedness
incurred from capital projects that were begun or completed prior to the
imposition of such tax or (ii) to finance capital projects after the imposition
of such tax.
§58.1-606.1. Additional local use tax; use of revenues for construction or renovation of schools.
A. 1. The governing body of a qualifying locality
county or city may levy a use tax at the rate of such sales tax under §
58.1-605.1 to provide revenue for capital projects for the construction or
renovation of schools in serving such locality county or
city. For the purposes of this section, "capital projects" means
construction, additions, renovations, including retrofitting and enlarging
public school buildings, infrastructure, including technology infrastructure,
and site acquisition for public school buildings and facilities. Such tax
shall be added to the rates of the state and local use tax imposed by this
chapter and shall be subject to all the provisions of this chapter, and all
amendments thereof, and the rules and regulations published with respect
thereto, except that no discount under §58.1-622 shall be allowed on a local
use tax.
2. Any tax imposed pursuant to this section shall expire
(i) if the capital projects for the construction or renovation of schools are
to be financed by bonds or loans, on the date by which such bonds or loans
shall be repaid or (ii) if the capital projects for the construction or
renovation of schools are not to be financed by bonds or loans, on a date
chosen by the governing body and specified in any resolution passed pursuant to
the provisions of subsection B. Such expiration date shall not be more than 20
years after the date of the resolution passed pursuant to the provisions of
subsection B.
B. The governing body of the qualifying locality
county or city, if it elects to impose a local use tax under this section
may do so only if it has previously imposed the local sales tax authorized by §
58.1-605.1, by the adoption of an ordinance stating its purpose and referring
to this section and providing that the local use tax shall become effective on
the first day of a month at least 120 days after its adoption. Such
ordinance shall state the date on which the use tax shall expire. A
certified copy of such ordinance shall be forwarded to the Tax Commissioner so
that it will be received within five days after its adoption.
C. Any local use tax levied under this section shall be administered and collected by the Tax Commissioner in the same manner and subject to the same exemptions and penalties as provided for the state use tax; however, the local use tax levied under this section shall not be levied on food purchased for human consumption or essential personal hygiene products, as such terms are defined in §58.1-611.1.
D. The local use tax authorized by this section shall not
apply to transactions to which the sales tax applies, the situs of which for
state and local sales tax purposes is the locality county or city
of location of each place of business of every dealer paying the tax to the
Commonwealth without regard to the locality county or city of
possible use by the purchasers. However, the local use tax authorized by this
section shall apply to tangible personal property purchased outside the
Commonwealth for use or consumption within the locality county or
city imposing the local use tax, or stored within the locality
county or city for use or consumption, where the property would have been
subject to the sales tax if it had been purchased within the Commonwealth. The
local use tax shall also apply to leases or rentals of tangible personal
property where the place of business of the lessor is outside the Commonwealth
and such leases or rentals are subject to the state tax. Moreover, the local
use tax shall apply in all cases in which the state use tax applies.
E. Out-of-state dealers who hold certificates of registration to collect the use tax from their customers for remittance to the Commonwealth shall, to the extent reasonably practicable, in filing their monthly use tax returns with the Tax Commissioner, break down their shipments into the Commonwealth by counties and cities so as to show the county or city of destination. If, however, the out-of-state dealer is unable accurately to assign any shipment to a particular county or city, the local use tax on the tangible personal property involved shall be remitted to the Commonwealth by such dealer without attempting to assign the shipment to any county or city.
F. Local use tax revenue shall be deposited in the special
fund established pursuant to subsection E of §58.1-605.1. The Comptroller
shall distribute the revenue to the qualifying locality county or
city as provided in subsection F of §58.1-605.1.
G. All revenue from this local use tax revenue shall be
used solely for capital projects described in clauses (i) and (ii) for
new construction or major renovation of schools in serving
the qualifying locality county or city, including bond and loan
financing costs related to such construction or renovation. Revenues from
this tax may be used (i) for repayment of existing indebtedness incurred from
capital projects that were begun or completed prior to the imposition of such
tax or (ii) to finance capital projects after the imposition of such tax.
2. That any county or city that has imposed a local sales or use tax under §58.1-605.1 or 58.1-606.1 of the Code of Virginia, as amended by this act, as of June 30, 2024, and that wants to extend such local sales or use tax beyond the expiration date provided in the referendum imposing such local sales or use tax shall, prior to the expiration date of such local sales or use tax, receive approval of such extension in an additional referendum held in accordance with the provisions of §58.1-605.1 of the Code of Virginia, as amended by this act, and initiated by a resolution of the local governing body.
