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Virginia Enacts Affiliate Nexus Law


Nexus

Virginia has enacted legislation requiring certain remote sellers that utilize in-state facilities to collect and remit Virginia sales tax. Under the new law, a dealer is presumed to have nexus in Virginia if any commonly controlled person maintains a distribution center, warehouse, fulfillment center, office, or similar location in Virginia that facilitates the delivery of tangible personal property sold by the dealer to its customers. Dealers may rebut the presumption if they can demonstrate that the commonly controlled person’s activities in Virginia are not significantly associated with the dealer’s ability to establish or maintain a market in Virginia. “Commonly controlled person” is defined as any person that is a member of the same “controlled group of corporations” as the dealer or any other entity that bears the same ownership relationship to the dealer as a corporation that is a member of the same controlled group of corporations. The law takes effect on the earlier of September 1, 2013, or the effective date of federal legislation that authorizes states to require a seller to collect taxes on sales of goods to in-state purchasers regardless of the location of the seller. If such federal legislation is enacted prior to August 15, 2013, and the effective date of the federal legislation is after September 1, 2013 but on or before January 1, 2014, then the provisions will become effective on January 1, 2014. For an update on this news item, click here to view our news item Virginia Affiliate Nexus Law Becomes Effective September 1, 2013.  (Ch. 590 (S.B. 597), Laws 2012, effective as noted)

(05/21/2012)
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