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2003 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 58.1-611.1 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-611.1. Rate of tax on sales of food purchased for human consumption; Food Tax Reduction Program.
A. Subject to the conditions of subsections D and E, the tax imposed by §§ 58.1-603 and 58.1-604 on food purchased for human consumption shall be levied and distributed as follows:
1. From January 1, 2000, through March 31, 2001, the tax rate on such food shall be three percent of the gross sales price. The revenue from the tax shall be distributed as follows: (i) the revenue from the tax at the rate of one-half percent shall be distributed as provided in subsection A of § 58.1-638, (ii) the revenue from the tax at the rate of one percent shall be distributed as provided in subsections B, C and D of § 58.1-638, and (iii) the revenue from the tax at the rate of one and one-half percent shall be used for general fund purposes.
2. From April 1, 2001, through March 31, 2002, the tax rate on such food shall be two and one-half percent of the gross sales price. The revenue from the tax shall be distributed as follows: (i) the revenue from the tax at the rate of one-half percent shall be distributed as provided in subsection A of § 58.1-638, (ii) the revenue from the tax at the rate of one percent shall be distributed as provided in subsections B, C and D of § 58.1-638, and (iii) the revenue from the tax at the rate of one percent shall be used for general fund purposes.
3. From April 1, 2002, through March 31, 2003, the tax rate on such food shall be two percent of the gross sales price. The revenue from the tax shall be distributed as follows: (i) the revenue from the tax at the rate of one-half percent shall be distributed as provided in subsection A of § 58.1-638, (ii) the revenue from the tax at the rate of one percent shall be distributed as provided in subsections B, C and D of § 58.1-638, and (iii) the revenue from the tax at the rate of one-half percent shall be used for general fund purposes.
4. On and after April 1, 2003, the tax rate on such food shall be one and one-half percent of the gross sales price. The revenue from the tax shall be distributed as follows: (i) the revenue from the tax at the rate of one-half percent shall be distributed as provided in subsection A of § 58.1-638 and (ii) the revenue from the tax at the rate of one percent shall be distributed as provided in subsections B, C and D of § 58.1-638.
B. The provisions of this section shall not affect the imposition of tax on food purchased for human consumption pursuant to §§ 58.1-605 and 58.1-606.
C. As used in this section, "food purchased for human consumption" has the same
meaning as "food" defined in the Food Stamp Act of 1977, 7 U.S.C. § 2012, as
amended, and federal regulations adopted pursuant to that Act, except it shall not
include seeds and plants which produce food for human consumption. For the purpose
of this section, "food purchased for human consumption" shall not include food
sold by any retail establishment where the gross receipts derived from the sale
of food prepared by such retail establishment for immediate consumption on or
off the premises of the retail establishment constitutes more than eighty 80
percent of the total gross receipts of that retail establishment, including but not limited to motor
fuel purchases, regardless of whether such prepared food is consumed on the premises of that retail
establishment. For purposes of this section, "retail establishment" means each
place of business for which any "dealer," as defined in § 58.1-612, is required
to apply for and receive a certificate of registration pursuant to § 58.1-613.
D. Notwithstanding the tax rates set forth in subsection A, the rate of tax on
sales of food purchased for human consumption for any twelve 12-month period
beginning on or after April 1, 2001, shall not be reduced below the rate then in effect for the
Commonwealth's current fiscal year if:
1. Actual general fund revenues for the fiscal year preceding a fiscal year in which a rate reduction is contemplated in subsection A do not exceed the official general fund revenue estimates for such preceding fiscal year, as estimated in the most recently enacted and approved general appropriation act, by at least one percent; or
2. Any of the events listed in subsection C of § 58.1-3524 or subsection B of § 58.1-3536 have occurred during the then current fiscal year.
E. If the tax rate on food purchased for human consumption remains the same for
the period January 1, 2000, through March 31, 2001, and the subsequent twelve
12-month period beginning on April 1, 2001, or with respect to any
consecutive twelve 12-month periods beginning on and after April 1, 2001, the
tax rate on such food shall remain the same unless none of the conditions
described in subsection D have occurred, in which event the tax rate on food
purchased for human consumption for the immediately following twelve 12-month
period shall be equal to the next lowest tax rate listed in subsection A.
F. There is hereby created on the books of the Comptroller a nonreverting fund
entitled the Food Tax Reserve Fund which shall be used solely for the statutory
purposes of the Food Tax Reduction Program as established by this section, and
as may be provided for in the general appropriation act. For the purpose of the
Comptroller's preliminary and final annual reports required by § 2.2-813, all
balances remaining in the Fund on June 30 of each year shall be considered a portion
of the fund balance of the general fund of the state treasury.
G. The taxes imposed pursuant to §§ 58.1-604.4 and 58.1-604.5 shall not apply
to food purchased for human consumption.