SEARCH SITE
VIRGINIA LAW PORTAL
- Code of Virginia
- Virginia Administrative Code
- Constitution of Virginia
- Charters
- Authorities
- Compacts
- Uncodified Acts
- RIS Users (account required)
SEARCHABLE DATABASES
- Bills & Resolutions
session legislation - Bill Summaries
session summaries - Reports to the General Assembly
House and Senate documents - Legislative Liaisons
State agency contacts
ACROSS SESSIONS
- Subject Index: Since 1995
- Bills & Resolutions: Since 1994
- Summaries: Since 1994
Developed and maintained by the Division of Legislative Automated Systems.
2004 SPECIAL SESSION I
041846392Be it enacted by the General Assembly of Virginia:
1. That §§ 58.1-605, 58.1-606, and 58.1-628 of the Code of Virginia are amended and reenacted as follows:
§ 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.
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. The applicable brackets of prices shall be as prescribed in § 58.1-628 for the combined state and local tax. No discount under § 58.1-622 shall be allowed on a local sales tax.
C. 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 sixty 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.
D. 1. Subject to the provisions of subdivision D 2, the council of any city and the governing body of any county may levy an additional one-half percent general retail sales tax 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. The applicable brackets of prices shall be as prescribed in § 58.1-628 for the combined state and local tax. No discount under § 58.1-622 shall be allowed on a local sales tax.
2. This additional one-half percent local sales tax shall be levied only if the tax is approved in a referendum within the county or city, which shall be held in accordance with § 24.2-684 and initiated either by a resolution of the board of supervisors, city council, or on the filing of a petition signed by a number of registered voters of the county or city equal in number to 10 percent of the number of voters registered in the county or city, as appropriate on January 1 of the year in which the petition is filed with the court of such county or city. The clerk of the circuit court shall publish notice of the election in a newspaper of general circulation in the county or city once a week for three consecutive weeks prior to the election. If the voters affirm the levy of the additional one-half percent local sales tax, the tax shall be effective on such terms as the governing body may by ordinance prescribe. If such resolution of the board of supervisors or city council, or such petition states for what projects and purposes the revenues collected from the tax are to be used, then the question on the ballot for the referendum shall include language stating for what projects and purposes the revenues collected from the tax are to be used.
DE. 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, with the adjustments required by § 58.1-628.
EF. 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.
FG. 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 six months as follows:
one-sixth of the total adjustment shall be included in the payments for the
next six 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.
GH. 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 preceding school age population census,
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 census and a proper
reduction made in the school age population of the county or counties from
which the annexed territory was acquired.
HI. One-half of such payments to counties are subject to the further
qualification, other than as set out in subsection GH above, that in any county
wherein is situated any incorporated town not constituting a separate special school district which
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 statewide school census. 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 preceding school age population census, 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 census and a proper reduction made in the school age
population of the county or counties from which the annexed territory was
acquired.
IJ. Notwithstanding the provisions of subsection HI, 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 which 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.
JK. It is further provided that if any incorporated town which would otherwise
be eligible to receive funds from the county treasurer under subsection G H or
H I of this section be located in a county which 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.
§ 58.1-606. To what extent and under what conditions cities and counties may levy local use tax; collection thereof by Commonwealth and return of revenues to the cities and counties.
A. The council of any city and the governing body of any county which has levied or may hereafter levy a city or county sales tax under § 58.1-605 may levy a city or county use 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 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 the applicable brackets of prices shall be as prescribed in § 58.1-628 for the combined state and local tax, and except that no discount under § 58.1-622 shall be allowed on a local use tax.
B. The council of any city and the governing body of any county desiring to impose a local use tax under this section may do so in the manner following:
1. If the city or county has previously imposed the local sales tax authorized by § 58.1-605, the local use tax may be imposed by the council or governing body by the adoption of a resolution by a majority of all the members thereof, by a recorded yea and nay vote, 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 sixty days after the adoption of the resolution. A certified copy of such resolution shall be forwarded to the Tax Commissioner so that it will be received within five days after its adoption. The resolution authorized by this paragraph may be adopted in the manner stated notwithstanding any other provision of law, including any charter provision.
2. If the city or county has not imposed the local sales tax authorized by § 58.1-605, the local use tax may be imposed by ordinance together with the local sales tax in the manner set out in subsections B and C of § 58.1-605.
C. 1. Subject to the provisions of subdivision C 2, the council of any city and the governing body of any county may levy an additional one-half percent general retail sales tax 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. The applicable brackets of prices shall be as prescribed in § 58.1-628 for the combined state and local tax. No discount under § 58.1-622 shall be allowed on a local sales tax.
2. This additional one-half percent local sales tax shall be levied only if the tax is approved in a referendum within the county or city, which shall be held in accordance with § 24.2-684 and initiated either by a resolution of the board of supervisors, city council, or on the filing of a petition signed by a number of registered voters of the county or city equal in number to 10 percent of the number of voters registered in the county or city, as appropriate on January 1 of the year in which the petition is filed with the court of such county or city. The clerk of the circuit court shall publish notice of the election in a newspaper of general circulation in the county or city once a week for three consecutive weeks prior to the election. If the voters affirm the levy of the additional one-half percent local sales tax, the tax shall be effective on such terms as the governing body may by ordinance prescribe. If such resolution of the board of supervisors or city council, or such petition states for what projects and purposes the revenues collected from the tax are to be used, then the question on the ballot for the referendum shall include language stating for what projects and purposes the revenues collected from the tax are to be used.
CD. 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 penalties as provided
for the state use tax, with the adjustments required by § 58.1-628.
DE. 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 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. However, the local use
tax authorized by this section shall apply to tangible personal property
purchased without this Commonwealth for use or consumption within the city or
county imposing the local use tax, or stored within the city or county for use
or consumption, where the property would have been subject to the sales tax if
it had been purchased within this 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 without this 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.
EF. Out-of-state dealers who hold certificates of registration to collect the
use tax from their customers for remittance to this Commonwealth shall, to the
extent reasonably practicable, in filing their monthly use tax returns with the
Tax Commissioner, break down their shipments into this Commonwealth by cities
and counties so as to show the city or county of destination. If, however, the
out-of-state dealer is unable accurately to assign any shipment to a particular
city or county, 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 city or county.
FG. Local use tax revenue shall be distributed among the cities and counties
for which it is collected, respectively, as shown by the records of the Department, and the procedure
shall be the same as that prescribed for distribution of local sales tax
revenue under § 58.1-605. The local use tax revenue that is not accurately
assignable to a particular city or county shall be distributed monthly by the
appropriate state authorities among the cities and counties in this Commonwealth
imposing the local use tax upon the basis of taxable retail sales in the
respective cities and counties in which the local sales and use tax was in
effect in the taxable month involved, as shown by the records of the
Department, and computed with respect to taxable retail sales as reflected by
the amounts of the local sales tax revenue distributed among such cities and
counties, respectively, in the month of distribution. Notwithstanding any other
provision of this section, the Tax Commissioner shall develop a uniform method
to distribute local use tax. Any significant changes to the method of local use
tax distribution shall be phased in over a five year period. Distribution
information shall be shared with the affected localities prior to
implementation of the changes.
GH. All local use tax revenue shall be used, applied or disbursed by the cities
and counties as provided in § 58.1-605 with respect to local sales tax revenue.
§ 58.1-628. Bracket system for combined state and local tax.
The following Tax Commissioner shall prepare brackets of prices that shall be
used for the collection of the combined state and local tax: on sales of less
than $5.
$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 greater than $5, the tax shall be computed at
four and one-half percent or five percent in those localities in which an
additional local sales and use tax is approved in accordance with subsection D of
§ 58.1-605 and subsection C of § 58.1-606, 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, or five percent in those localities in which an additional local
sales and use tax is approved in accordance with subsection D of § 58.1-605 and
subsection C of § 58.1-606, 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.