Accelerated Sales Tax & Other Tax Changes (language only)

Item 3-5.00 #1c

Language
Page 421, after line 14, insert:
"§ 3-5.00  ADJUSTMENTS AND MODIFICATIONS TO TAX COLLECTIONS
§ 3-5.01  ACCELERATED SALES AND USE TAX COLLECTIONS
A.1.  Notwithstanding the provisions of § 58.1-615, Code of Virginia, any dealer, as defined by § 58.1-612, Code of Virginia, or direct payment 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, 2001, to June 30, 2002, shall be required to make a payment equal to 90 percent of the sales and use tax liability for June 2002 as the estimated amount of sales and use tax liability for the month of June 2003.  Such tax payments shall be made on or before the 30th day of June 2003, 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 2003.  Payments under this paragraph shall be made in accordance with procedures established by the Tax Commissioner and shall be considered general fund revenue.  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 2003 return due July 20, 2003.  The State Comptroller shall make no distribution of the collections in accordance with § 58.1-638 until the provisions of subparagraph 3 are met.  The provisions of this section shall not apply to persons who are required to file only a Form ST-7, Consumer User Tax Return.
2.  Notwithstanding the provisions of § 58.1-615, Code of Virginia, any dealer as defined by § 58.1-612, Code of Virginia, or direct payment 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, 2002, to June 30, 2003, shall be required to make a payment equal to 90 percent of the sales and use tax liability for June 2003 as the estimated amount of sales and use tax liability for the month of June 2004.  Such tax payments shall be made on or before the 30th day of June, 2004, 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, 2004.  Payments under this paragraph shall be made in accordance with procedures established by the Tax Commissioner and shall be considered general fund revenue.  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 2004 return due July 20, 2004.  The State Comptroller shall make no distribution of the collections in accordance with §58.1-638 until the provisions of subparagraph 3 are met.  The provisions of this section shall not apply to persons who are required to file only a Form ST-7, Consumer User Tax Return.
3.  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 on the sales and use tax liability as provided in paragraphs F 1 and F 2 above shall subject the dealer or direct payment permit holder to a penalty of six percent of the amount of tax 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 paragraphs A 1 and A 2 above shall become delinquent on the first day following the due date set forth in paragraphs A 1 and A 2  if not paid.
4.  If the Governor determines by July 31 of each year that funds are available to transfer such collections in accordance with § 58.1-638, he shall direct the State Comptroller to make such distribution.  The Governor will report his determination to the Chairmen of the Senate Finance, House Finance and House Appropriations Committees on August 1 of each year.
5.  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.  Effective July 1, 2004, the distribution of the collections in accordance with § 58.1-638, Code of Virginia, shall no longer be governed by paragraph 2.
§ 3-5.02  RETAIL SALES & USE TAX EXEMPTION FOR INTERNET SERVICE PROVIDERS
A.  Notwithstanding any other provision of law, for purchases made between July 1, 2002, and June 30, 2003, any exemption from the retail sales and use tax applicable to production, distribution, and other equipment used to provide Internet-access services by providers of Internet service, as defined in § 58.1-602, Code of Virginia, shall apply to only 90 percent of the cost of purchases otherwise qualifying for exemption.  For purchases made between July 1, 2003, and June 30, 2004, any exemption from the retail sales and use tax applicable to production, distribution, and other equipment used to provide Internet-access services by providers of Internet service, as defined in § 58.1-602, Code of Virginia, shall occur as a refund request to the Tax Commissioner.   The Tax Commissioner shall develop procedures for such refunds.
§ 3-5.03  QUALIFIED EQUITY AND SUBORDINATED DEBT INVESTMENT TAX CREDIT
Notwithstanding any other provision of law, for taxable years beginning on January 1, 2002, the amount of the Qualified Equity and Subordinated Debt Investments Tax Credit available under § 58.1-339.4, Code of Virginia, shall be limited to $4,000,000 for calendar year 2002 and $3,000,000 for calendar years 2003 and 2004.
§ 3-5.04  RETALIATORY COSTS TO OTHER STATES TAX CREDIT
Notwithstanding any other provision of law, for license years beginning on July 1, 2003, the amount of the Tax Credit for Retaliatory Costs to Other States available under § 58.1-2510, Code of Virginia for those companies not receiving a credit for the license year beginning on January 1, 2000, shall be limited to 80 percent of the retaliatory costs paid to other states for those companies or groups having more than 100 qualified full-time employees in this Commonwealth during the entire license year and who met the definition of "qualified investment" on or after January 1, 2001.  For license years beginning on July 1, 2003, the amount of the Tax Credit shall be limited to 60 percent to these same companies or groups.
§ 3-5.05  REPEAL REDUCTION IN WITHHOLDING OF INDIVIDUAL INCOME TAXES
The second enactment of Chapter 289 of the Acts of Assembly of 1989, as amended and re-enacted by Chapter 888 of the Acts of Assembly of 1990 and Chapters 385 and 401 of the Acts of Assembly of 1992, Chapters 139 and 147 of the Acts of Assembly of 1994, Chapters 375 and 458 of the Acts of Assembly of 1996, Chapter 464 of the Acts of Assembly of 1998, and Chapters 501 and 553 of the Acts of Assembly of 2000, is hereby repealed."
§
3-5.06 INTEREST EARNINGS
Notwithstanding any other provision of law, for the period April 1, 2003, through June 30, 2003, interest earnings on all funds held by the State Treasurer normally allocated to specific nongeneral fund accounts shall not be allocated to such nongeneral fund accounts.  It is hereby acknowledged that this provision shall not apply to those specific nongeneral funds to which interest earnings must be allocated as mandated by the Constitution of Virginia or by federal law.  If the Governor determines on July 31, 2003, that funds are available to pay the interest earnings that these funds would have had during the period April 1, 2003, through June 30, 2003, he shall direct the State Comptroller to make such allocation.  The Governor shall report his determination to the Chairmen of the Senate Finance and House Appropriations Committees on August 15, 2003."

Explanation
(This amendment modifies existing tax laws and other revenue items.)