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Developed and maintained by the Division of Legislative Automated Systems.
1997 SESSION
975692633Patrons-- Colgan, Earley, Maxwell and Williams; Delegates: Brickley, Cooper and Parrish
Be it enacted by the General Assembly of Virginia:
1. That §§ 58.1-603, 58.1-604, 58.1-614, 58.1-627, 58.1-628, 58.1-638, and 58.1-639 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding sections numbered 58.1-3001.1 and 58.1-3005.1, as follows:
§ 58.1-603. Imposition of sales tax.
There is hereby levied and imposed, in addition to all other taxes and fees of
every kind now imposed by law, a license or privilege tax upon every person who
engages in the business of selling at retail or distributing tangible personal
property in this Commonwealth, or who rents or furnishes any of the things or
services taxable under this chapter, or who stores for use or consumption in
this Commonwealth any item or article of tangible personal property as defined
in this chapter, or who leases or rents such property within this Commonwealth,
in the amount of three and one-half five percent:
1. Of the gross sales price of each item or article of tangible personal property when sold at retail or distributed in this Commonwealth.
2. Of the gross proceeds derived from the lease or rental of tangible personal property, where the lease or rental of such property is an established business, or part of an established business, or the same is incidental or germane to such business.
3. Of the cost price of each item or article of tangible personal property stored in this Commonwealth for use or consumption in this Commonwealth.
4. Of the gross proceeds derived from the sale or charges for rooms, lodgings or accommodations furnished to transients as set out in the definition of "retail sale" in § 58.1-602.
5. Of the gross sales of any services which are expressly stated as taxable within this chapter.
§ 58.1-604. Imposition of use tax.
There is hereby levied and imposed, in addition to all other taxes and fees now
imposed by law, a tax upon the use or consumption of tangible personal property
in this Commonwealth, or the storage of such property outside the Commonwealth
for use or consumption in this Commonwealth, in the amount of three and
one-half five percent:
1. Of the cost price of each item or article of tangible personal property used or consumed in this Commonwealth. Tangible personal property which has been acquired for use outside this Commonwealth and subsequently becomes subject to the tax imposed hereunder shall be taxed on the basis of its cost price if such property is brought within this Commonwealth for use within six months of its acquisition; but if so brought within this Commonwealth six months or more after its acquisition, such property shall be taxed on the basis of the current market value (but not in excess of its cost price) of such property at the time of its first use within this Commonwealth. Such tax shall be based on such proportion of the cost price or current market value as the duration of time of use within this Commonwealth bears to the total useful life of such property (but it shall be presumed in all cases that such property will remain within this Commonwealth for the remainder of its useful life unless convincing evidence is provided to the contrary).
2. Of the cost price of each item or article of tangible personal property stored outside this Commonwealth for use or consumption in this Commonwealth.
3. A transaction taxed under § 58.1-603 shall not also be taxed
under this section, nor shall the same transaction be taxed more than once
under either section.
4. The use tax shall not apply with respect to the use of any
article of tangible personal property brought into this Commonwealth by a
nonresident individual, visiting in Virginia, for his personal use, while
within this Commonwealth.
5. The use tax shall not apply to out-of-state mail order catalog
purchases totaling $100 or less during any calendar year.
§ 58.1-614. Vending machine sales.
A. Notwithstanding the provisions of §§ 58.1-603 and 58.1-604,
whenever a dealer makes sales of tangible personal property through vending
machines, or in any other manner making collection of the tax impractical, as
determined by the Tax Commissioner, such dealer shall be required to report his
wholesale purchases for sale at retail from vending machines and shall be
required to remit an amount based on four and one-half
six percent of such wholesale purchases.
B. Notwithstanding the provisions of §§ 58.1-605 and 58.1-606, dealers making sales of tangible personal property through vending machines shall report and remit the one percent local sales and use tax computed as provided in subsection A of this section.
C. The provisions of subsections A and B of this section shall not be applicable to vending machine operators all of whose machines are under contract to nonprofit organizations. Such operators shall report only the gross receipts from machines selling items for more than ten cents and shall be required to remit an amount based on a percentage of their remaining gross sales established by the Tax Commissioner to take into account the inclusion of sales tax.
D. Notwithstanding any other provisions in this section or § 58.1-628, when the Tax Commissioner determines that it is impractical to collect the tax in the manner provided by those sections, such dealer shall be required to remit an amount based on a percentage of gross receipts which takes into account the inclusion of the sales tax.
E. The provisions of this section shall not be applicable to any dealer who fails to maintain records satisfactory to the Tax Commissioner. A dealer making sales of tangible personal property through vending machines shall obtain a certificate of registration under § 58.1-613 in relevant form for each county or city in which he has machines.
§ 58.1-627. Bracket system for state tax.
The following Tax Department shall prepare and distribute
tables providing brackets of prices shall to be
used for the collection of the state tax imposed by this
chapter:.
$0.00 to $0.14 no tax
.15 to .42 1¢ tax
.43 to .71 2¢ tax
.72 to .99 3¢ tax
1.00 to 1.28 4¢ tax
1.29 to 1.57 5¢tax
1.58 to 1.85 6¢ tax
1.86 to 2.14 7¢ tax
2.15 to 2.42 8¢ tax
2.43 to 2.71 9¢ tax
2.72 to 2.99 10¢ tax
3.00 to 3.28 11¢ tax
3.29 to 3.57 12¢ tax
3.58 to 3.85 13¢ tax
3.86 to 4.14 14¢ tax
4.15 to 4.42 15¢ tax
4.43 to 4.71 16¢ tax
4.72 to 5.00 17¢ tax
On transactions over five dollars, the tax shall be computed at three and
one-half percent, one-half cent or more being treated as one cent. If a
dealer can show to the satisfaction of the Tax Commissioner that more than
eighty-five percent of the total dollar volume of his gross taxable sales
during the taxable month was from individual sales at prices of ten cents or
less each, and that he was unable to adjust his prices in such manner as to
prevent the economic incidence of the sales tax from falling on him, the Tax
Commissioner shall determine the proper tax liability of the dealer based on
that portion of the dealer's gross taxable sales which was from sales at prices
of eleven cents or more.
§ 58.1-628. Bracket system for combined state and local tax.
The following Tax Department shall prepare and distribute
tables providing brackets of prices shall to be
used for the collection of the combined state and local tax:
$0.00 to $0.11 no tax
.12 to .33 1¢ tax
.34 to .55 2¢ tax
.56 to .77 3¢ tax
.78 to .99 4¢ tax
1.00 to 1.22 5¢ tax
1.23 to 1.44 6¢ tax
1.45 to 1.66 7¢ tax
1.67 to 1.88 8¢ tax
1.89 to 2.11 9¢ tax
2.12 to 2.33 10¢ tax
2.34 to 2.55 11¢ tax
2.56 to 2.77 12¢ tax
2.78 to 2.99 13¢ tax
3.00 to 3.22 14¢ tax
3.23 to 3.44 15¢ tax
3.45 to 3.66 16¢ tax
3.67 to 3.88 17¢ tax
3.89 to 4.11 18¢ tax
4.12 to 4.33 19¢ tax
4.34 to 4.55 20¢ tax
4.56 to 4.77 21¢ tax
4.78 to 5.00 22¢ tax
On transactions over five dollars, the tax shall be computed at four and
one-half percent, one half cent or more being treated as one cent. The
foregoing bracket system shall not relieve the dealer from the duty and
liability to remit an amount equal to four and one-half percent of his gross
taxable sales as provided in this chapter. If the dealer,
however, can show to the satisfaction of the Tax Commissioner that more
than eighty-five percent of the total dollar volume of his gross taxable sales
during the taxable month was from individual sales at prices of ten cents or
less each and that he was unable to adjust his prices in such manner as to
prevent the economic incidence of the sales tax from falling on him, the Tax
Commissioner shall determine the proper tax liability of the dealer based on
that portion of the dealer's gross taxable sales which was from sales at prices
of eleven cents or more.
§ 58.1-638. Disposition of state sales and use tax revenue; localities' share.
A. The Comptroller shall designate a specific revenue code number for all the state sales and use tax revenue collected under the preceding sections of this chapter.
1. The sales and use tax revenue generated by the one-half percent sales and use tax increase enacted by the 1986 Special Session of the General Assembly shall be paid, in the manner hereinafter provided in this section, to the Transportation Trust Fund as defined in § 33.1-23.03:1. Of the funds paid to the Transportation Trust Fund, an aggregate of 4.2 percent shall be set aside as the Commonwealth Port Fund as hereinafter provided; an aggregate of 2.4 percent shall be set aside as the Commonwealth Airport Fund as hereinafter provided; and an aggregate of 8.4 percent shall be set aside as the Commonwealth Mass Transit Fund as hereinafter provided. The Fund's share of such net revenue shall be computed as an estimate of the net revenue to be received into the state treasury each month, and such estimated payment shall be adjusted for the actual net revenue received in the preceding month. All payments shall be made to the Fund on the last day of each month.
2. There is hereby created in the Department of the Treasury a special nonreverting fund which shall be a part of the Transportation Trust Fund and which shall be known as the Commonwealth Port Fund.
a. The Commonwealth Port Fund shall be established on the books of the Comptroller and the funds remaining in such Fund at the end of a biennium shall not revert to the general fund but shall remain in the Fund. Interest earned on such funds shall remain in the Fund and be credited to it. Funds may be paid to any authority, locality or commission for the purposes hereinafter specified.
b. The amounts allocated pursuant to this section shall be allocated by the Commonwealth Transportation Board to the Board of Commissioners of the Virginia Port Authority to be used to support port capital needs and the preservation of existing capital needs of all ocean, river, or tributary ports within the Commonwealth.
c. Commonwealth Port Fund revenue shall be allocated by the Board of Commissioners to the Virginia Port Authority in order to foster and stimulate the flow of maritime commerce through the ports of Virginia, including but not limited to the ports of Richmond, Hopewell and Alexandria.
3. There is hereby created in the Department of the Treasury a special nonreverting fund which shall be part of the Transportation Trust Fund and which shall be known as the Commonwealth Airport Fund. The Commonwealth Airport Fund shall be established on the books of the Comptroller and any funds remaining in such Fund at the end of a biennium shall not revert to the general fund but shall remain in the Fund. Interest earned on the funds shall be credited to the Fund. The funds so allocated shall be allocated by the Commonwealth Transportation Fund to the Virginia Aviation Board. The funds shall be allocated by the Virginia Aviation Board to any Virginia airport which is owned by the Commonwealth, a governmental subdivision thereof, or a private entity to which the public has access for the purposes enumerated in § 5.1-2.16, or is owned or leased by the Metropolitan Washington Airports Authority (MWAA), as follows:
From July 1, 1995, through June 30, 2000, any new funds in excess of $12.1 million which are available for allocation by the Virginia Aviation Board from the Commonwealth Transportation Fund, shall be allocated as follows: sixty percent to MWAA, up to a maximum annual amount of two million dollars, and forty percent to air carrier airports as provided in subdivision A 3 a. Except for adjustments due to changes in enplaned passengers, no air carrier airport sponsor, excluding MWAA, shall receive less funds identified under subdivision A 3 a than it received in fiscal year 1994-95.
Of the remaining amount:
a. Forty percent of the funds shall be allocated to air carrier airports, except airports owned or leased by MWAA, based upon the percentage of enplanements for each airport to total enplanements at all air carrier airports, except airports owned or leased by MWAA. No air carrier airport sponsor, however, shall receive less than $50,000 nor more than $2 million per year from this provision.
b. Forty percent of the funds shall be allocated by the Aviation Board for air carrier and reliever airports on a discretionary basis, except airports owned or leased by MWAA.
c. Twenty percent of the funds shall be allocated by the Aviation Board for general aviation airports on a discretionary basis.
4. There is hereby created in the Department of the Treasury a special nonreverting fund which shall be a part of the Transportation Trust Fund and which shall be known as the Commonwealth Mass Transit Fund.
a. The Commonwealth Mass Transit Fund shall be established on the books of the Comptroller and any funds remaining in such Fund at the end of the biennium shall not revert to the general fund but shall remain in the Fund. Interest earned on such funds shall be credited to the Fund. Funds may be paid to any local governing body, transportation district commission or public service corporation for the purposes hereinafter specified.
b. The amounts allocated pursuant to this section may be used to support a maximum of fifty percent of the public transportation administrative costs and up to eighty percent of the costs of ridesharing programs borne by the locality. These amounts may be used to support up to ninety-five percent of the local or nonfederal share of capital project costs for public transportation and ridesharing equipment, facilities, and associated costs. Capital costs may include debt service payments on local or agency transit bonds. Further, these amounts may be used to support a maximum of ninety-five percent of the costs borne by the locality for the purchase of fuels, lubricants, tires and maintenance parts and supplies for public transportation. The term "borne by the locality" shall mean the local share eligible for state assistance consisting of costs in excess of the sum of fares and other operating revenues plus federal assistance received by the locality.
c. Commonwealth Mass Transit Fund revenue shall be allocated by the Commonwealth Transportation Board as follows:
(1) Funds for special programs, which shall include ridesharing, experimental transit, and technical assistance, shall not exceed 1.5 percent of the Fund.
(2) The Board may allocate these funds to any locality or planning district commission to finance up to eighty percent of the local share of all costs associated with the development, implementation, and continuation of ridesharing programs.
(3) Funds allocated for experimental transit projects may be paid to any local governing body, transportation district commission, or public corporation or may be used directly by the Department of Rail and Public Transportation for the following purposes:
(a) To finance up to ninety-five percent of the capital costs related to the development, implementation and promotion of experimental public transportation and ridesharing projects approved by the Board.
(b) To finance up to ninety-five percent of the operating costs of experimental mass transportation and ridesharing projects approved by the Board for a period of time not to exceed twelve months.
(c) To finance up to ninety-five percent of the cost of the development and implementation of any other project designated by the Board where the purpose of such project is to enhance the provision and use of public transportation services.
d. Funds allocated for public transportation promotion and operation studies may be paid to any local governing body, planning district commission, transportation district commission, or public transit corporation, or may be used directly by the Department of Rail and Public Transportation for the following purposes and aid of public transportation services:
(1) At the approval of the Board to finance a program administered by the Department of Rail and Public Transportation designed to promote the use of public transportation and ridesharing throughout Virginia.
(2) To finance up to fifty percent of the local share of public transportation operations planning and technical study projects approved by the Board.
e. At least 73.5 percent of the Fund shall be distributed to each transit property in the same proportion as its operating expenses bear to the total statewide operating expenses and shall be spent for the purposes specified in subdivision 4 b.
f. The remaining twenty-five percent shall be distributed for capital purposes on the basis of ninety-five percent of the nonfederal share for federal projects and ninety-five percent of the total costs for nonfederal projects. In the event that total capital funds available under this paragraph are insufficient to fund the complete list of eligible projects, the funds shall be distributed to each transit property in the same proportion that such capital expenditure bears to the statewide total of capital projects.
5. Funds for Metro shall be paid by the Northern Virginia Transportation Commission to the Washington Metropolitan Area Transit Authority (WMATA) and be a credit to the Counties of Arlington and Fairfax and the Cities of Alexandria, Falls Church and Fairfax in the following manner:
a. Local payments of WMATA rail transit bonds shall be paid first and apportioned to each locality using the WMATA capital formula.
b. The remaining funds shall be apportioned by calculating twenty-five percent of the capital and operating costs and seventy-five percent of the capital and operating subsidies applied to each locality. Capital costs may include twenty percent of annual local bus capital expenses.
Appropriations from the Commonwealth Mass Transit Fund are intended to provide a stable and reliable source of revenue as defined by Public Law 96-184.
B. The sales and use tax revenue generated by a one percent sales and use tax
shall be distributed among the counties and cities of this Commonwealth in the
manner hereafter in this section provided in subsections C and
D.
C. The localities' share of the net revenue distributable under this section among the counties and cities shall be apportioned by the Comptroller and distributed among them by warrants of the Comptroller drawn on the Treasurer of Virginia as soon as practicable after the close of each month during which the net revenue was received into the state treasury. The distribution of the localities' share of such net revenue shall be computed with respect to the net revenue received into the state treasury during each month, and such distribution shall be made as soon as practicable after the close of each such month.
D. The net revenue so distributable among the counties and cities shall be apportioned and distributed upon the basis as certified to the Comptroller by the Department of Education, of the number of children in each county and city according to the most recent statewide census of school population taken by the Department of Education pursuant to § 22.1-284, as adjusted in the manner hereinafter provided. No special school population census, other than a statewide census, shall be used as the basis of apportionment and distribution except that in any calendar year in which a statewide census is not reported, the Department of Education shall adjust such school population figures by the same percent of annual change in total population estimated for each locality by The Center for Public Service. The revenue so apportionable and distributable is hereby appropriated to the several counties and cities for maintenance, operation, capital outlays, debt and interest payments, or other expenses incurred in the operation of the public schools, which shall be considered as funds raised from local resources. In any county, however, wherein is situated any incorporated town constituting a school division, the county treasurer shall pay into the town treasury for maintenance, operation, capital outlays, debt and interest payments, or other expenses incurred in the operation of the public schools, the proper proportionate amount received by him in the ratio that the school population of such town bears to the school population of the entire county. If the school population of any city or of any town constituting a school division is increased by the annexation of territory since the last preceding school population census, such increase shall, for the purposes of this section, be added to the school population of such city or town as shown by the last such census and a proper reduction made in the school population of the county or counties from which the annexed territory was acquired.
E. The sales and use tax revenue generated by the one and one-half percent sales and use tax rate increase enacted by the 1997 Session of the General Assembly shall be distributed among the counties, cities, and towns of the Commonwealth as follows:
1. The net revenue so distributable among the counties, cities, and towns shall be apportioned and distributed in accordance with the following formula: Each county, city, and town shall be distributed a portion of such net revenue in an amount determined by multiplying (i) the amount of personal property tax revenue collected by the locality pursuant to Article 1 (§ 58.1-3500 et seq.) of Chapter 35 of this title during calendar year 1997 by (ii) a fraction, the numerator of which is the total amount of net revenue generated by the one and one-half percent sales and use tax rate increase enacted by the 1997 Session of the General Assembly during the calendar year for which such distribution is made and the denominator of which is total amount of all such personal property tax revenue collected by all counties, cities, and towns during calendar year 1997.
2. The localities' shares of the net revenue distributable under this subsection among the counties, cities, and towns shall be apportioned by the Comptroller and distributed among them by warrants of the Comptroller drawn on the Treasurer of Virginia as soon as practicable after the close of each calendar year. The distribution of the localities' shares of such net revenue shall be computed with respect to the net revenue generated by the one and one-half percent sales and use tax rate increase enacted by the 1997 Session of the General Assembly and received into the state treasury during each calendar year, and such distribution shall be made as soon as practicable after the close of each calendar year.
3. The revenue distributed to localities pursuant to this subsection shall be applied to reduce reliance on the personal property tax as a source of local general fund revenue, as provided in §§ 58.1-3001.1 and 58.1-3005.1.
E F. If errors are made in any distribution, or
adjustments are otherwise necessary, the errors shall be corrected and
adjustments made in the distribution for the next quarter or for subsequent
quarters.
F G. The term "net revenue," as used in this section,
means the gross revenue received into the general fund or the Transportation
Trust Fund of the state treasury under the preceding sections of this chapter,
less refunds to taxpayers.
§ 58.1-639. Transitional provisions.
A. To the extent of any increase in the state sales and use tax rate enacted by
the 1986 Special 1997 Session of the Virginia General
Assembly, the Tax Commissioner, upon application of the purchaser in accordance
with regulations promulgated by the Commissioner, shall have the authority to
refund state sales or use taxes paid on purchases of tangible personal property
made pursuant to bona fide real estate construction contracts, contracts for
the sale of tangible personal property, and leases, provided that the real
estate construction contract, contract for the sale of tangible personal
property or lease is entered into prior to the date of enactment of the
increase of the state sales and use tax rate; and further provided that the
date of delivery of the tangible personal property is on or before March 30,
1987 1998. The term "bona fide contract," when used in
this section in relation to real estate construction contracts, shall include
but not be limited to those contracts which are entered into prior to the
enactment of the increase in the state sales and use tax rate, provided that
such contracts include plans and specifications.
B. Notwithstanding the foregoing March 30, 1987
1998, delivery date requirement, with respect to bona fide real estate
construction contracts which contain a specific and stated date of completion,
the date of delivery of such tangible personal property shall be on or before
the completion date of the applicable project.
C. Applications for refunds pursuant to this section shall be made in accordance with the provisions of § 58.1-1823. Interest computed in accordance with § 58.1-1833 shall be added to the tax refunded pursuant to this section.
§ 58.1-3001.1. Maximum rate of tangible personal property tax fixed by counties.
A. As used in this section:
"Amount of additional sales tax" means the amount, if any, by which the amount distributed to the county pursuant to subsection E of § 58.1-638 for the current fiscal year exceeds the amount so distributed to the county for the preceding fiscal year.
"Base percentage" means a fraction, the numerator of which is the amount by which (i) the total amount of personal property tax revenue collected by all counties, cities, and towns pursuant to Article 1 (§ 58.1-3500 et seq.) of Chapter 35 of this title during calendar year 1997 exceeded (ii) the total amount of net revenue generated statewide during calendar year 1998 by the one and one-half percent sales and use tax rate increase enacted by the 1997 Session of the General Assembly, and the denominator of which is the total amount of personal property tax revenue collected by all counties, cities, and towns pursuant to Article 1 (§ 58.1-3500 et seq.) of Chapter 35 of this title during calendar year 1997.
B. At the meeting at which the amount of county taxes for the current year are fixed as provided by § 58.1-3001, the governing body of each county shall fix the rates of its tangible personal property tax for fiscal years beginning on and after January 1, 1998, as provided in this section.
C. The rates of tax on classes of tangible personal property for the first fiscal year beginning on or after January 1, 1998, shall be fixed at levels reasonably expected to generate personal property tax revenue equal to the amount, if any, by which tangible personal property tax revenue collected during calendar year 1997 exceeds the amount expected to be distributed to the county pursuant to subsection E of § 58.1-638 during such fiscal year.
D. The rates of tax on classes of tangible personal property for subsequent fiscal years shall be fixed at levels reasonably expected to generate personal property tax revenue equal to the amount of expected personal property tax revenue for the preceding fiscal year, reduced by the product obtained by multiplying the amount of additional sales tax revenue by the base percentage.
E. If the county taxes classifications of tangible personal property at different rates, any reduction in rates of tax on classifications of tangible personal property required by this section shall be made proportionately to all such rates.
F. Following any reduction in the rate of taxation of any classification of tangible personal property pursuant to this section, the governing body of a county shall not thereafter increase the rate of taxation on any classification of tangible personal property.
§ 58.1-3005.1. Maximum rate of tangible personal property tax fixed by cities and towns.
A. As used in this section:
"Amount of additional sales tax" means the amount, if any, by which the amount distributed to the city or town pursuant to subsection E of § 58.1-638 for the current fiscal year exceeds the amount so distributed to the city or town for the preceding fiscal year.
"Base percentage" means a fraction, the numerator of which is the amount by which (i) the total amount of personal property tax revenue collected by all counties, cities, and towns pursuant to Article 1 (§ 58.1-3500 et seq.) of Chapter 35 of this title during calendar year 1997 exceeded (ii) the total amount of net revenue generated statewide during calendar year 1998 by the one and one-half percent sales and use tax rate increase enacted by the 1997 Session of the General Assembly, and the denominator of which is the total amount of personal property tax revenue collected by all counties, cities, and towns pursuant to Article 1 (§ 58.1-3500 et seq.) of Chapter 35 of this title during calendar year 1997.
B. At the meeting at which the amount of city or town taxes for the current year are fixed as provided by § 58.1-3005, the council of each city and town shall fix the rates of its tangible personal property tax for fiscal years beginning on and after January 1, 1998, as provided in this section.
C. The rates of tax on classes of tangible personal property for the first fiscal year beginning on or after January 1, 1998, shall be fixed at levels reasonably expected to generate personal property tax revenue equal to the amount, if any, by which tangible personal property tax revenue collected during calendar year 1997 exceeds the amount expected to be distributed to the city or town pursuant to subsection E of § 58.1-638 during such fiscal year.
D. The rates of tax on classes of tangible personal property for subsequent fiscal years shall be fixed at levels reasonably expected to generate personal property tax revenue equal to the amount of expected personal property tax revenue for the preceding fiscal year, reduced by the product obtained by multiplying the amount of additional sales tax revenue by the base percentage.
E. If the city or town taxes classifications of tangible personal property at different rates, any reduction in rates of tax on classifications of tangible personal property required by this section shall be made proportionately to all such rates.
F. Following any reduction in the rate of taxation of any classification of tangible personal property pursuant to this section, the council of the city or town shall not thereafter increase the rate of taxation on any classification of tangible personal property.
2. That the provisions of this act shall become effective on January 1, 1998, except that the amendments to § 58.1-638 of the Code of Virginia shall become effective for state sales and use taxes due for periods on and after January 1, 1998.