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2002 SESSION

023036476
SENATE BILL NO. 16
Offered January 9, 2002
Prefiled December 13, 2001
A BILL to amend and reenact §§ 15.2-1104.1, 30-19.1:3, 58.1-601, 58.1-608.2, 58.1-609.13, 58.1-610, 58.1-623, 58.1-623.1, 58.1-629, 58.1-3510.1, 58.1-3510.3, and 58.1-3818, as it is currently effective and as it may become effective, of the Code of Virginia, to amend the Code of Virginia by adding a section numbered 58.1-609.14, and to repeal §§ 30-19.05, 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, and 58.1-609.10 of the Code of Virginia, relating to educational, medical-related, nonprofit civic and community service, nonprofit cultural, and miscellaneous sales and use tax exemptions and repealing several sales and use tax exemptions benefitting nonprofit organizations and providing for refunds of sales and use tax on certain purchases made by nonprofit organizations.
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Patrons-- Miller, K.G., Quayle and Trumbo
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Referred to Committee on Finance
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Be it enacted by the General Assembly of Virginia:

1. That §§ 15.2-1104.1, 30-19.1:3, 58.1-601, 58.1-608.2, 58.1-609.13, 58.1-610, 58.1-623, 58.1-623.1, 58.1-629, 58.1-3510.1, 58.1-3510.3, and 58.1-3818, as it is currently effective and as it may become effective, of the Code of Virginia are amended and reenacted, and that the Code of Virginia is amended by adding a section numbered 58.1-609.14 as follows:

§ 15.2-1104.1. Tax on admissions to charitable events.

A municipal corporation that generally levies an admissions tax may, by ordinance, elect not to levy an admissions tax on admission to an event, provided that the purpose of the event is solely to raise money for charitable purposes and that the net proceeds derived from the event will be transferred to an entity or entities that are exempt from sales and use tax pursuant to §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, and 58.1-609.10 or eligible for a refund of sales and use tax pursuant to § 58.1-609.14.

§ 30-19.1:3. Limiting time for introduction and consideration of retail sales and use tax exemption bills.

A. Any bill establishing or expanding an exemption or exclusion from the retail sales and use tax pursuant to Chapter 6 (§ 58.1-600 et seq.) of Title 58.1 shall be introduced for consideration by the General Assembly no later than the first calendar day of any regular session of the General Assembly.

B. No bill described in subsection A of this section shall be drafted or otherwise prepared by the Division of Legislative Services until the Division has received the Department of Taxation's preliminary determination as provided by subsection A of § 30-19.05.

CB. The provisions of this section shall not apply with respect to any bill delaying the effective date of any retail sales and use tax exemption.

§ 58.1-601. Administration of chapter.

A. The Tax Commissioner shall administer and enforce the assessment and collection of the taxes and penalties imposed by this chapter.

B. For purposes of evaluating the fiscal, economic and policy impact of sales and use tax exemptions, the Tax Commissioner may require from any person information relating to the evaluation of exempt purchases or sales, information relating to the qualification for exempt purchases, and information relating to direct or indirect government financial assistance which that the person receives. Such information shall be filed on forms prescribed by the Tax Commissioner.

C. The provisions of subsection B shall also apply to persons eligible for a refund of sales or use taxes as provided in this chapter. The request for information from such persons may include information relating to the evaluation of refunds of such taxes paid to such persons and information relating to a person's eligibility for a refund of such taxes.

§ 58.1-608.2. Additional requirements applicable to organizations seeking exempt status.

A. On and after July 1, 1994, in addition to the requirements set forth in §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, and 58.1-609.10, any nonprofit organization that has qualified for a sales and use tax exemption under any of such sections and is required to submit to the Department of Taxation the information required by subsection C of § 30-19.05 shall also remain in compliance with the provisions of subsection D of § 30-19.05, and the failure to do so shall constitute grounds for the revocation of exempt status.

B. Organizations which seek exempt status with the Department of Taxation after an exemption category or classification under §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9 or § 58.1-609.10 has been enacted shall qualify for exempt status if the Department of Taxation issues, in addition to an exemption certificate or certificate of registration as provided in subsection F of § 30-19.05, a determination letter which states that such organization satisfies the requirements of subsections B, C, and D of § 30-19.05. No further action by the General Assembly shall be required until such time as the exemption category or classification may be the subject of a bill seeking renewal, extension, or further amendment.

Organizations that seek exempt status with the Department of Taxation after an exemption category or classification under subsection A of § 58.1-609.14 has been enacted shall qualify for exempt status if the Department of Taxation issues, in addition to an exemption certificate or certificate of registration as provided in § 58.1-623, a determination letter that states that such organization satisfies the requirements of such category or classification.

§ 58.1-609.13. Exceptions to § 58.1-609.17.

Notwithstanding the provisions of subdivision 1 of § 58.1-609.10 subdivision A. 15. of § 58.1-609.14, the tax imposed by a county, city or town pursuant to §§ 58.1-605 and 58.1-606 shall apply to artificial or propane gas, firewood, coal or home heating oil used for domestic consumption as defined in subdivision 1 of § 58.1-609.10 subdivision A. 15. of § 58.1-609.14, unless exempted by a duly adopted ordinance of the local governing body of a county, city or town. The provisions of this section shall not apply to fuel for domestic consumption purchased by churches organized not for profit and (i) which that are exempt from taxation under § 501 (c) (3) of the Internal Revenue Code or (ii) whose real property is exempt from local taxation pursuant to the provisions of § 58.1-3606.

§ 58.1-609.14. Exemptions from sales and use tax; certain nonprofit organizations eligible for a refund of sales and use tax.

A. The tax imposed by this chapter or pursuant to the authority granted in §§ 58.1-605 and 58.1-606 shall not apply to the following:

1. School lunches sold and served to pupils and employees of schools and subsidized by government; school textbooks sold by a local board or authorized agency thereof; and school textbooks sold for use by students attending a nonprofit college or other institution of learning, when sold (i) by such institution of learning or (ii) by any other dealer, when such textbooks have been certified by a department or instructor of such institution of learning as required textbooks for students attending courses at such institution.

2. (i) Tangible personal property for use or consumption by a college or other institution of learning, including food purchased for free distribution at the facilities of the college or other institution of learning, and (ii) tangible personal property for use or consumption by, sold by, or donated to a noncommercial educational telecommunications entity, said exemption to apply to each transaction in the chain of commerce from manufacture to final disposition, provided that such college, institution of learning, or telecommunications entity is nonprofit.

3. Medicines, drugs, hypodermic syringes, artificial eyes, contact lenses, eyeglasses, eyeglass cases and contact lens storage containers when distributed free of charge, all solutions or sterilization kits or other devices applicable to the wearing or maintenance of contact lenses or eyeglasses when distributed free of charge, and hearing aids dispensed by or sold on prescriptions or work orders of licensed physicians, dentists, optometrists, ophthalmologists, opticians, audiologists, hearing aid dealers and fitters, nurse practitioners, physician assistants, and veterinarians; controlled drugs purchased for use by a licensed physician, optometrist, licensed nurse practitioner, or licensed physician assistant in his professional practice, regardless of whether such practice is organized as a sole proprietorship, partnership or professional corporation, or any other type of corporation in which the shareholders and operators are all licensed physicians, optometrists, licensed nurse practitioners, or licensed physician assistants engaged in the practice of medicine, optometry, or nursing, but excluding nursing homes, clinics, and similar corporations not otherwise exempt under this section; medicines and drugs purchased for use or consumption by a licensed hospital; and samples of prescription drugs and medicines and their packaging distributed free of charge to authorized recipients in accordance with the Federal Food, Drug and Cosmetic Act (21 U.S.C.A. § 301 et seq., as amended). Any veterinarian dispensing or selling medicines or drugs on prescription shall be deemed to be the user or consumer of all such medicines and drugs.

4. Wheelchairs and parts therefor, braces, crutches, prosthetic devices, orthopedic appliances, catheters, urinary accessories, other durable medical equipment and devices, and related parts and supplies specifically designed for those products; and insulin and insulin syringes, and equipment, devices or chemical reagents that may be used by a diabetic to test or monitor blood or urine, when such items or parts are purchased by or on behalf of an individual for use by such individual. Durable medical equipment is equipment that (i) can withstand repeated use, (ii) is primarily and customarily used to serve a medical purpose, (iii) generally is not useful to a person in the absence of illness or injury, and (iv) is appropriate for use in the home.

5. Drugs and supplies used in hemodialysis and peritoneal dialysis.

6. Special equipment installed on a motor vehicle when purchased by a handicapped person to enable such person to operate the motor vehicle.

7. Special typewriters and computers and related parts and supplies specifically designed for those products used by handicapped persons to communicate when such equipment is prescribed by a licensed physician.

8. a. Beginning July 1, 1998, (i) any nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings and (ii) any samples of nonprescription drugs and proprietary medicines distributed free of charge by the manufacturer, including packaging materials and constituent elements and ingredients.

b. The terms "nonprescription drugs" and "proprietary medicines" shall be defined pursuant to regulations promulgated by the Department of Taxation. The exemption authorized in this subdivision shall not apply to cosmetics.

9. Tangible personal property purchased for use or consumption by or sold by a volunteer fire department or volunteer rescue squad, an auxiliary or junior organization of such department or squad not conducted for profit, a nonprofit association of which the regular membership is composed of such volunteer fire departments or volunteer rescue squads, and construction materials to be incorporated into realty when sold to and used by such organization, rather than a contractor, in construction, maintenance, or repair of any property of such organization.

10. Tangible personal property, except property used in any form for recording and reproducing services, purchased by nonprofit churches that are exempt from taxation under § 501 (c) (3) of the Internal Revenue Code, or whose real property is exempt from local taxation pursuant to the provisions of § 58.1-3606, for use (i) in religious worship services by a congregation or church membership while meeting together in a single location and (ii) in the libraries, offices, meeting or counseling rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries, including kindergarten, elementary and secondary schools. The exemption for such churches shall also include baptistries; bulletins, programs, newspapers and newsletters that do not contain paid advertising and are used in carrying out the work of the church; gifts including food for distribution outside the public church building; and food, disposable serving items, cleaning supplies and teaching materials used in the operation of camps or conference centers by the church or an organization composed of churches that are exempt under this subdivision and that are used in carrying out the work of the church or churches.

11. a. Tangible personal property sold or leased for use in nonprofit nutrition programs for the elderly qualifying under 42 U.S.C. § 3030e through 42 U.S.C. § 3030g, as amended, as administered by the Virginia Department for the Aging, and the food and food products sold under such programs to elderly persons and the food and food products sold by such program participants to disabled or handicapped persons under the age of sixty.

b. Beginning July 1, 1997, all other tangible personal property purchased by the area agencies on aging through programs administered by the Virginia Department for the Aging.

12. Tangible personal property purchased with food coupons issued by the United States Department of Agriculture under the Food Stamp Program or drafts issued through the Virginia Special Supplemental Food Program for Women, Infants, and Children.

13. Tangible personal property withdrawn from inventory and donated to (i) an organization exempt from taxation under § 501 (c) (3) of the Internal Revenue Code or (ii) the Commonwealth, any political subdivision of the Commonwealth, or any school, agency or instrumentality thereof.

14. Tangible personal property for use or consumption by, sold by or donated to a food bank or organization exempt from taxation pursuant to § 501 (c) (3) of the Internal Revenue Code and organized exclusively for the distribution of foods to infants, the ill, or the needy; the exemptions shall apply to each transaction in the chain of commerce from manufacture to final disposition, provided that such food bank or organization is not conducted for profit.

15. Artificial or propane gas, firewood, coal or home heating oil used for domestic consumption. "Domestic consumption" means the use of artificial or propane gas, firewood, coal or home heating oil by an individual purchaser for other than business, commercial or industrial purposes. The Tax Commissioner shall establish by regulation a system for use by dealers in classifying individual purchases for domestic or nondomestic use based on the principal usage of such gas, wood, coal or oil. Any person making a nondomestic purchase and paying the tax pursuant to this chapter who uses any portion of such purchase for domestic use may, between the first day of the first month and the fifteenth day of the fourth month following the year of purchase, apply for a refund of the tax paid on the domestic use portion.

16. An occasional sale, as defined in § 58.1-602.

17. Tangible personal property for future use by a person for taxable lease or rental as an established business or part of an established business, or incidental or germane to such business, including a simultaneous purchase and taxable leaseback.

18. Delivery of tangible personal property outside the Commonwealth for use or consumption outside of the Commonwealth. Delivery of goods destined for foreign export to a factor or export agent shall be deemed to be delivery of goods for use or consumption outside of the Commonwealth.

19. Tangible personal property purchased for use or consumption in the performance of maintenance and repair services at Nuclear Regulatory Commission-licensed nuclear power plants located outside the Commonwealth.

B. 1. Any organization that was exempt from the state and local retail sales or use tax as of July 1, 2002, pursuant to former §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10, may apply for a refund of the tax imposed by this chapter, or imposed pursuant to the authority granted in § 58.1-605 or § 58.1-606, on its purchases, made on and after January 1, 2003, (i) of tangible personal property for use or consumption or (ii) of taxable services.

2. Any organization that is (i) exempt from taxation under § 501 (c) (3) or § 501 (c) (4) of the Internal Revenue Code, as amended or renumbered, and (ii) not included under subdivision B. 1., may apply for a refund of the tax imposed by this chapter, or imposed pursuant to the authority granted in § 58.1-605 or § 58.1-606, on its purchases, made on and after January 1, 2003, (i) of tangible personal property for use or consumption or (ii) of taxable services.

3. a. The application for a refund under this subsection shall be on forms prescribed by the Tax Commissioner and shall be filed with the Tax Commissioner within three years from the last day of the calendar year in which such purchase is made. The Tax Commissioner shall implement procedures allowing eligible organizations to apply quarterly for refunds beginning with calendar year 2003. In addition, when and if the amount that may be refunded to an organization under this subsection is at least $5,000 in a calendar year, including any amount already refunded in such year, the organization may apply for the refund at any time during such calendar year.

b. The amount of the refund issued under this subsection to an eligible organization shall equal 100 percent of the tax imposed by this chapter, or imposed pursuant to the authority granted in § 58.1-605 or § 58.1-606. Interest shall be allowed and paid on any refund that has not been issued within fifty-nine days after the Tax Commissioner has received the application for refund. Such interest shall begin to accrue from a date sixty days after the Tax Commissioner has received a properly completed application for refund and shall end on a date determined by the Tax Commissioner preceding the date of the refund check by not more than five days. Interest shall be paid at a rate equal to the rate of interest established pursuant to § 58.1-15.

c. Such organizations may not apply for a refund of such tax pursuant to this subsection on any purchase that is not in accordance with the normal responsibilities of the organization. In addition, no refund shall be issued for a purchase made by an eligible organization until it has furnished all necessary and reasonable information as requested by the Tax Commissioner. The application for refund pursuant to this subsection shall include a report of the organization's total purchases (for which the refund application is being filed) by county and city. In addition, the application for refund shall require only that information that is strictly necessary for purposes of issuing such refunds and the application shall be structured so as to allow a summary report of the organization's total purchases by county and city.

d. Refunds under this subsection shall be issued by warrant of the Comptroller drawn on the Treasurer of Virginia as soon as practicable after certification from the Tax Commissioner of the proper amount of the refund and the address to which the refund should be sent.

e. The amount of the refund, pursuant to this subsection, attributable to the tax authorized under § 58.1-605 or § 58.1-606 shall be deducted from the respective county's or city's share of the net revenue distributable pursuant to subsection C of § 58.1-638. The amount of the refund attributable to each county or city shall be determined from the organization's report of its total purchases by county and city as provided in subdivision c. Such deduction from a county's or city's share of the net revenue distributable shall occur in the month following the month in which the refund has been issued.

f. The provisions of subsections E, F, and H of § 58.1-623.1 shall apply mutatis mutandis to applications for refunds made pursuant to this subsection.

§ 58.1-610. Contractors.

A. Any person who contracts orally, in writing, or by purchase order, to perform construction, reconstruction, installation, repair, or any other service with respect to real estate or fixtures thereon, and in connection therewith to furnish tangible personal property, shall be deemed to have purchased such tangible personal property for use or consumption. Any sale, distribution, or lease to or storage for such person shall be deemed a sale, distribution, or lease to or storage for the ultimate consumer and not for resale, and the dealer making the sale, distribution, or lease to or storage for such person shall be obligated to collect the tax to the extent required by this chapter.

B. Any person who contracts to perform services in this Commonwealth and is furnished tangible personal property for use under the contract by the person, or his agent or representative, for whom the contract is performed, and a sales or use tax has not been paid to this Commonwealth by the person supplying the tangible personal property, shall be deemed to be the consumer of the tangible personal property so used, and shall pay a use tax based on the fair market value of the tangible personal property so used, irrespective of whether or not any right, title or interest in the tangible personal property becomes vested in the contractor. This subsection, however, shall not apply to the industrial materials exclusion or the other industrial exclusions set out in § 58.1-609.3, including those set out in subdivisions 2, 3 and 4 thereof; the media-related exemptions set out in subdivision 2 of § 58.1-609.6; the governmental exclusions set out in subdivision 4 of § 58.1-609.1; the agricultural exclusions set forth in subdivision 1 of § 58.1-609.2; or the exclusion for baptistries set forth in subdivision 2 of § 58.1-609.8 subdivision A. 10. of § 58.1-609.14.

C. Any person who contracts orally, in writing, or by purchase order to perform any service in the nature of equipment rental, and the principal part of that service is the furnishing of equipment or machinery which will not be under the exclusive control of the contractor, shall be liable for the sales or use tax on the gross proceeds from such contract to the same extent as the lessor of tangible personal property.

D. Tangible personal property incorporated in real property construction which loses its identity as tangible personal property shall be deemed to be tangible personal property used or consumed within the meaning of this section. Any person selling fences, venetian blinds, window shades, awnings, storm windows and doors, locks and locking devices, floor coverings (as distinguished from the floors themselves), cabinets, kitchen equipment, window air conditioning units or other like or comparable items, shall be deemed to be a retailer of such items and not a using or consuming contractor with respect to them, whether he sells to and installs such items for contractors or other customers and whether or not such retailer fabricates such items.

E. Nothing in this section shall be construed to (i) affect or limit the resale exclusion provided for in this chapter, or the industrial materials and other industrial exclusions set out in § 58.1-609.3, the exclusion for baptistries set out in subdivision 2 of § 58.1-609.8 subdivision A. 10. of § 58.1-609.14, or the partial exclusion for the sale of modular buildings as set out in § 58.1-610.1, or (ii) impose any sales or use tax with respect to the use in the performance of contracts with the United States, this Commonwealth, or any political subdivision thereof, of tangible personal property owned by a governmental body which actually is not used or consumed in the performance thereof.

F. Notwithstanding the other provisions of this section, any person engaged in the business of furnishing and installing locks and locking devices shall be deemed a retailer of such items and not a using or consuming contractor with respect to them.

§ 58.1-623. Sales or leases presumed subject to tax; exemption certificates.

A. All sales or leases are subject to the tax until the contrary is established. The burden of proving that a sale, distribution, lease, or storage of tangible personal property is not taxable is upon the dealer unless he takes from the taxpayer a certificate, issued by the Tax Commissioner, to the effect that the property is exempt under this chapter.

B. The certificate mentioned in this section shall relieve the person who takes such certificate from any liability for the payment or collection of the tax, except upon notice from the Tax Commissioner that such certificate is no longer acceptable. Such certificate shall be signed by and bear the name and address of the taxpayer; shall indicate the number of the certificate of registration, if any, issued to the taxpayer; shall indicate the general character of the tangible personal property sold, distributed, leased, or stored, or to be sold, distributed, leased, or stored under a blanket exemption certificate; and shall be substantially in such form as the Tax Commissioner may prescribe. If an exemption pertains to a nonprofit organization, other than a nonprofit church, that has qualified for a sales and use tax exemption under §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9 or § 58.1-609.10, the exemption certificate shall be valid until the scheduled expiration of the applicable provision of such section, which expiration date shall be stated on the exemption certificate or certificate of registration issued to the organization.

C. If a taxpayer who gives a certificate under this section makes any use of the property other than an exempt use or retention, demonstration, or display while holding the property for resale, distribution, or lease in the regular course of business, such use shall be deemed a taxable sale by the taxpayer as of the time the property or service is first used by him, and the cost of the property to him shall be deemed the sales price of such retail sale. If the sole use of the property other than retention, demonstration, or display in the regular course of business is the rental of the property while holding it for sale, distribution, or lease, the taxpayer may elect to pay the tax on the amount of the rental charged, rather than the cost of the property to him.

D. If a taxpayer gives a certificate under this section with respect to the purchase of fungible goods and thereafter commingles these goods with other fungible goods not so purchased, but of such similarity that the identity of the constituent goods in the commingled mass cannot be determined, sales or distributions from the mass of commingled goods shall be deemed to be sales or distributions of the goods so purchased until a quantity of commingled goods equal to the quantity of purchased goods so commingled has been sold or distributed.

§ 58.1-623.1. Misuse of exemption certificates; suspension of exemptions; penalties.

A. Whenever the Tax Commissioner determines that any person has misused an exemption certificate, the Tax Commissioner, after giving such person ten days' notice in writing specifying the time and place of hearing and requiring him to show cause why the exemption should not be suspended, may suspend the exemption held by such person. The notice may be personally served or served by registered mail directed to the last known address of such person.

B. Any person who knowingly uses or gives an exemption certificate during a period of suspension of an exemption under this section shall be guilty of a Class 1 misdemeanor.

C. It shall be the duty of any person whose exemption is suspended under the provisions of this section to notify each dealer from whom purchases or leases of tangible personal property are made, of the suspension of its exemption, and of the invalidity of any exemption certificates filed with such dealers.

D. To facilitate the administration of this section, notwithstanding the provisions of § 58.1-623, the Tax Commissioner is authorized to issue exemption permits to any person who is entitled to an exemption, and to require the use of such permits in making purchases. If the Tax Commissioner issues an exemption permit to a nonprofit organization, other than a nonprofit church, that has qualified for a sales and use tax exemption under §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9 or § 58.1-609.10, the provisions of subsection F of § 30-19.05 shall apply with respect thereto.

E. In lieu of the suspension of a person's exemption under subsection A of this section, the Tax Commissioner may assess a penalty of up to $1,000 for the misuse of an exemption certificate by that person or by any other person who, with the consent or knowledge of the exemption holder, has misused the certificate. The penalty shall be assessed and collected as a part of the tax, and the person so assessed may appeal the penalty pursuant to the provisions of Article 2 (§ 58.1-1820 et seq.) of Chapter 18 of this title.

F. In any instance in which the Tax Commissioner determines that there has been any misuse of an exemption certificate, the person holding the exemption shall be liable for the full amount of tax, and any interest thereon, applicable to any purchase improperly made with his exemption certificate.

G. The suspension of the exemption shall require that the person pay the full amount of the tax at the time of purchase and apply for a refund of the tax so paid. No interest shall be paid on any such refund Interest shall be paid on such refund in accordance with the conditions for the payment of interest on refunds as provided in § 58.1-609.14. Upon application of the person whose certificate has been suspended, the Tax Commissioner, for good cause shown, may reinstate the person's certificate; however, any such suspension period shall run for at least one year.

H. Notwithstanding § 58.1-3, the Tax Commissioner may report any gross misuses of exemption certificates to the Secretary of Finance and the chairmen of the money committees, for their confidential use, prior to the beginning of the following session of the General Assembly.

§ 58.1-629. Sale of business.

If any dealer liable for any tax, penalty, or interest levied hereunder sells out his business or stock of goods or quits the business, he shall make a final return and payment within fifteen days after the date of selling or quitting the business. His successors or assigns, if any, shall withhold sufficient of the purchase money to cover the amount of such taxes, penalties, and interest due and unpaid until such former owner produces a receipt from the Tax Commissioner showing that they have been paid or a certificate stating that no taxes, penalties, or interest is due. If the purchaser of a business or stock of goods fails to withhold the purchase money as above provided, he shall be personally liable for the payment of the taxes, penalties, and interest due and unpaid on account of the operation of the business by any former owner. Nothing herein shall be deemed to qualify or limit the exemption as to such a sale as is covered by subdivision 2 of § 58.1-609.10 subdivision A. 16. of § 58.1-609.14.

§ 58.1-3510.1. Daily rental property tax.

A. The governing body of any county, city or town may levy a tax in an amount not to exceed one percent, in addition to the tax levied pursuant to § 58.1-605, on the gross proceeds of any person engaged in the short-term rental business as defined in § 58.1-3510. "Gross proceeds" means the total amount charged to each person for the rental of daily rental property, excluding any state and local sales tax paid under the provisions of Chapter 6 (§ 58.1-600 et seq.) of this title.

B. Any person engaged in the short-term rental business as defined in § 58.1-3510 shall collect the rental tax from the lessee of the daily rental property at the time of the rental. The lessor of the daily rental property shall transmit a quarterly return to the commissioner of the revenue of the county, city or town wherein the tax is collected, indicating the gross proceeds derived from the short-term rental business. The commissioner of the revenue shall assess the tax due, and the treasurer or director of finance shall collect the daily rental property tax.

C. Notwithstanding the provisions of subsection B of this section, no tax shall be collected or assessed on (i) rentals by the Commonwealth, any political subdivision of the Commonwealth or the United States or (ii) any rental of durable medical equipment as defined in subdivision 2 of § 58.1-609.7 subdivision A. 4. of § 58.1-609.14.

§ 58.1-3510.3. Exemptions; penalties.

Provisions in §§ 58.1-609.1, through 58.1-609.10 of Chapter 6 58.1-609.2, 58.1-609.3, 58.1-609.5, 58.1-609.6 and subsection A of § 58.1-609.14 relating to exemptions, §§ 58.1-635 and 58.1-636 relating to penalties, and § 58.1-625 relating to the manner of collecting the local retail sales and use tax applicable in Chapter 6 (§ 58.1-600 et seq.) of this title, shall apply mutatis mutandis to the daily rental property tax, except that the commissioner of revenue shall assess the tax due, and the treasurer or director of finance shall collect the daily rental property tax, instead of the Department of Taxation. Any other provision in Chapter 6 shall apply if adopted by local ordinance pursuant to § 58.1-3510.1.

§ 58.1-3818. (Contingent expiration date) Admissions tax in certain counties.

A. Fairfax, Arlington, Dinwiddie, Prince George and Brunswick Counties are hereby authorized to levy a tax on admissions charged for attendance at any event. The tax shall not exceed ten percent of the amount of charge for admission to any such event. Notwithstanding any other provisions of law, the governing bodies of such counties shall prescribe by ordinance the terms, conditions and amount of such tax and may classify between events conducted for charitable and those conducted for noncharitable purposes.

B. Notwithstanding the provisions of subsection A of this section, any county with a population of at least 27,500 but not more than 28,250 and any county with a population of at least 10,400 but not more than 10,490 as determined by the 1990 United States Census are hereby authorized to levy a tax on admissions charged for attendance at any event as set forth in subsection A.

C. Notwithstanding the provisions of subsection A of this section, any county with a population of at least 12,450 but not more than 12,850 is hereby authorized to levy a tax on admissions charged for attendance at any spectator event; however, a tax shall not be levied on admissions charged to participants in order to participate in any event. The tax shall not exceed ten percent of the amount of charge for admission to any event. Notwithstanding any other provisions of law, the governing body of such county shall prescribe by ordinance the terms, conditions and amount of such tax and may classify between the events as set forth in § 58.1-3817.

D. Notwithstanding the provisions of subsections A, B and C of this section, any county in which a major league baseball stadium, as defined in § 15.2-5800, is located is hereby authorized to levy (i) a tax on admissions charged at any event at such stadium and (ii) a surcharge on admissions charged for attendance at any event at such stadium if it has a seating capacity of at least 40,000 seats. The tax on admissions shall not exceed ten percent. Such surcharge shall not exceed two percent of the charge for admissions. Notwithstanding any other provisions of law, the governing bodies of such counties shall prescribe by ordinance the terms, conditions and amounts of such tax and surcharge and may classify between events conducted for charitable and those conducted for noncharitable purposes.

E. Notwithstanding the provisions of subsections A, B, C and D of this section, localities may, by ordinance, elect not to levy an admissions tax on admission to an event, provided that the purpose of the event is solely to raise money for charitable purposes and that the net proceeds derived from the event will be transferred to an entity or entities that are exempt from sales and use tax pursuant to §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, and 58.1-609.10 or eligible for a refund of sales and use tax pursuant to § 58.1-609.14.

§ 58.1-3818. (Contingent effective date) Admissions tax in certain counties.

A. Fairfax, Arlington, Dinwiddie, Prince George and Brunswick Counties are hereby authorized to levy a tax on admissions charged for attendance at any event. The tax shall not exceed ten percent of the amount of charge for admission to any such event. Notwithstanding any other provisions of law, the governing bodies of such counties shall prescribe by ordinance the terms, conditions and amount of such tax and may classify between events conducted for charitable and those conducted for noncharitable purposes.

B. Notwithstanding the provisions of subsection A of this section, any county with a population of at least 27,500 but not more than 28,250 and any county with a population of at least 10,400 but not more than 10,490 as determined by the 1990 United States Census are hereby authorized to levy a tax on admissions charged for attendance at any event as set forth in subsection A.

C. Notwithstanding the provisions of subsection A of this section, any county with a population of at least 12,450 but not more than 12,850 is hereby authorized to levy a tax on admissions charged for attendance at any spectator event; however, a tax shall not be levied on admissions charged to participants in order to participate in any event. The tax shall not exceed ten percent of the amount of charge for admission to any event. Notwithstanding any other provisions of law, the governing body of such county shall prescribe by ordinance the terms, conditions and amount of such tax and may classify between the events as set forth in § 58.1-3817.

D. Notwithstanding the provisions of subsections A, B and C of this section, localities may, by ordinance, elect not to levy an admissions tax on admission to an event, provided that the purpose of the event is solely to raise money for charitable purposes and that the net proceeds derived from the event will be transferred to an entity or entities that are exempt from sales and use tax pursuant to §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, and 58.1-609.10 or eligible for a refund of sales and use tax pursuant to § 58.1-609.14.

2. That, except for clause 3 of this act and as provided in this enactment clause, the provisions of this act are effective January 1, 2003, and that §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, and 58.1-609.10 of the Code of Virginia are repealed effective January 1, 2003. Section 30-19.05 of the Code of Virginia is repealed effective July 1, 2002.

3. Beginning July 1, 2002, the Tax Commissioner shall promulgate guidelines to implement procedures for providing refunds to eligible organizations pursuant to the provisions of this act. In preparing such guidelines, the Tax Commissioner shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).

4. That any organization that was exempt from collecting state and local retail sales or use taxes as of July 1, 2002, pursuant to former §§ 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10 shall remain exempt from the collection of such taxes under the same terms and conditions as provided under such former sections.

5. That beginning with calendar year 2003 and calendar years thereafter, the Tax Commissioner shall quarterly provide a written report to the chairmen of the Senate Committee on Finance, the House Committee on Finance, and the House Committee on Appropriations that includes, but is not limited to, (i) the amount of sales and use taxes refunded year-to-date pursuant to the provisions of this act and the amount of purchases upon which such refunds were determined, and (ii) the same information required in clause (i) but reported by county or city.

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