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Virginia has enacted legislation that extends the sunset date for the state’s annual sales tax holiday for school supplies and clothing, Energy Star and WaterSense products and hurricane preparedness items from July 1, 2017 to July 1, 2022. For more information on Virginia’s sales tax holiday, visit our Sales Tax Holiday chart (Ch. 26 (H.B. 1529), Laws 2017, effective July 1, 2017)


Virginia has enacted legislation that authorizes a tax amnesty program to take place during the period July 1, 2017 through June 30, 2018 and lasting 60-75 days. The exact dates of the program are to be determined. Under the amnesty program, civil or criminal penalties and 50% of the interest assessed or assessable which are the result of nonpayment, underpayment, nonreporting, or underreporting of tax liabilities will be waived upon receipt of the payment of tax and interest owed. The program is applicable to any tax administered or collected by the Virginia Department of Taxation. Certain restrictions apply on who will be able to participate in the tax amnesty program. (Ch. 54 (H.B. 2246), Laws 2017, effective July 1, 2017)


UPDATE: Virginia has announced the dates for this amnesty program. The amnesty program will take place from September 13 through November 14, 2017. Virginia Tax sent letters to the last known address of eligible taxpayers detailing which bills and delinquent tax returns qualify for amnesty. If individuals did not receive a letter but know they have unpaid bills or delinquent tax returns, they may still qualify for the amnesty program. To take advantage of the program, taxpayers must pay 100% of the amnesty amount due for each delinquent tax period and file any required returns during the amnesty dates. In order to qualify, tax bills must be related to an amnesty eligible period and have an assessment date on or before June 15, 2017, while returns must be applicable to an eligible period. The periods eligible for amnesty vary by tax type and can be viewed here. For registered taxpayers, all periods open under the statute of limitations are included.  For unregistered participants, there is no limit to the look back period.  All taxes since nexus was created should be remitted.  For any tax liability that was eligible for amnesty benefits but remains unpaid (including audit assessments covering amnesty periods), a 20% penalty will apply.  This penalty is in addition to all other penalties.  For more information, visit the Virginia Tax webpage.


Virginia Governor Terry McAuliffe has signed the biennial budget bill which contains a provision regarding the sales and use tax exemption for internet services. For purchases made on or after July 1, 2006, any sales and use tax exemption applicable to production, distribution, and other equipment used to provide internet access services by internet service providers must be claimed as a refund request to the Tax Commissioner. (Ch. 780 (H.B. 30), Laws 2016, effective July 1, 2016, except as noted)


Effective July 1, 2016, Virginia’s sales and use tax exemption for tangible personal property purchased or leased for use or consumption directly and exclusively in basic research or research and development in the experimental or laboratory sensehas been expanded and will apply to property used in a federally funded research and development center, regardless of whether the property is used by the purchaser, lessee, or another person or entity.(Ch. 780 (H.B. 30), Laws 2016, effective July 1, 2016)


On August 25, 2016, House Judiciary Committee Chairman Robert Goodlatte released a discussion draft of the Online Sales Simplification Act of 2016. The legislation would implement a “hybrid origin” approach for remote sales. Under the legislation, states could impose sales tax on remote sales if the origin state participates in a clearinghouse.In this case, the tax is based on the origin state’s baseand taxability rules. The rate would be the origin state rate, unless the destination state participates. In that case, the rate used would be a single state-wide rate determined by each participating destination state. A remote seller would only remit sales tax to its origin state for all remote sales. Only the origin state would be able to audit a seller for remote sales. Non-participating states would not be able to receive distributions from the clearinghouse. Sellers would be required to provide reporting for remotes sales into participating states to the Clearinghouse so it can distribute the tax to the destination state. We will continue to monitor activity and update when the official bill is introduced.  (Discussion draft of Online Sales Simplification Act of 2016)



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