2002 Session

Budget Amendments - HB29 (Committee Approved)

Revised Sales Tax Acceleration Language (language only)

Item 3-5.02 #1h

Item 3-5.02 #1h

Modifications and Adjustments to Taxes and Fees
3: Miscellaneous & Part 4: General Provisions)

Page 529, after line 20, insert:
A.  Notwithstanding the provisions of § 58.1-615, Code of Virginia, any dealer as defined by § 58.1-612, Code of Virginia, or direct permit holder pursuant to § 58.1-624, Code of Virginia with taxable sales and purchases of $1.3 million or greater for the period July 1, 2000, to June 30, 2001, shall be required to make a payment equal to 90 percent of the sales and use tax liability for June 2001 as the estimated amount of sales and use tax liability for the month of June 2002.  Such tax payments shall be made on or before the 30th day of June 2002 if payment is made by electronic funds transfer, as defined in § 58.1-202.1, Code of Virginia.  If payment is made by other than electronic funds transfer, such payment shall be made on or before the 25th day of June 2002.  Payments under this paragraph shall be made in accordance with procedures established by the Tax Commissioner.  For purposes of this provision, taxable sales or purchases shall be computed without regard to the number of certificates of registration held by the dealer.  Every dealer or direct payment permit holder shall be entitled to a credit for the payment under this paragraph on the June 2002 return due July 20, 2002.  The provisions of this section shall not apply to persons who are required to file only a Form ST-7, Consumer Use Tax Return.
B.  In lieu of the penalties provided in § 58.1-635, Code of Virginia, except with respect to fraudulent returns, failure to make a timely payment or full payment of the sales and use tax liability as provided in paragraph A shall subject the dealer or direct payment permit holder to a penalty of 10 percent of the amount of tax underpayment that should have been properly paid to the Tax Commissioner.  Interest will accrue as provided in § 58.1-15, Code of Virginia.  The payment required by paragraph A shall become delinquent on the first day following the due date set forth in paragraph A if not paid.
C.  Notwithstanding any other provision of law, any cash balance resulting from such collections shall not be subject to reporting as reservations or designations of fund balance of the general fund, or liabilities of the general fund, as of June 30 for purposes of cash basis financial reporting as reflected in the Comptroller's annual financial report presented in accordance with § 2.2-813, Code of Virginia.
D.  It is the intent of the General Assembly that the payment requirement contained herein be phased out beginning in fiscal year 2006.  The payment amount for June 2006 should be reduced to 85 percent of the sales and purchases for the previous June and the payment amount should continue to be reduced until fully eliminated not later than June 2012."

(This amendment changes the proposal to accelerated sales and use tax collections proposed in the introduced budget. In June, dealers with annual sales in excess of $1.3 million would remit an amount equal to 90 percent of sales and use tax collections in May.)