2008 Session

Budget Amendments - SB30 (Member Request)

Chief Patron: Hanger
Sales tax exemption for certain organizations (language only)

Item 3-5.07 #1s

Item 3-5.07 #1s

Economic Development for Virginians with Disabilities Retail Sales and Use Tax Exemption

Page 495, following line 8, insert:
§ 3-5.00 Adjustments and Modifications to Tax Collections
A. The Commissioner of the Department of Rehabilitative Services, in consultation with the Commissioner of Taxation, shall implement and administer the rules for a retail sales & use tax credit program to provide job creation for people with disabilities or with barriers to self-sufficiency.
B. The Commissioner shall adopt procedures to administer the Economic Development for Virginians with Disabilities Retail Sales & Use Sales Tax Credit Program to carry out the purposes of the Program. The procedures shall include: (i) application procedures, (ii) procedures for adequate public notice of available assistance, (iii) selection criteria that the Commissioner shall consider in approving applications from qualified organizations, and (iv) provisions and certifications to ensure that funds available to the applicant by avoiding the sales taxes are spent and accounted for appropriately.
C. Definitions as used in this section:
"Nonprofit organization" means an organization that has qualified for exemption from income taxation under § 501(c)(3) of the Internal Revenue Code. "People with barriers to self-sufficiency" means people who have either (i) limited or no work experience, (ii) a low level of education or training, (iii) physical or mental disabilities, or (iv) lack of workplace skills. "People with disabilities" means people who have a physical, sensory or intellectual impairment as defined in § 51.5-3. "Qualified organization" means a nonprofit organization that has applied to the Commissioner and has been certified pursuant to paragraph E below.
D. Economic Development for Virginians with Disabilities Retail Sales & Use Tax Credit is established in the amount of up to $1 million annually.
E. Certification of nonprofit organization.
The Commissioner shall certify as qualified organizations those nonprofit organizations that:
1. Spend at least 75% of their gross revenues on program services, including directly employing or training for employment, people with disabilities or people with barriers to self-sufficiency, and
2. Have as a significant source of revenue the sale of donated goods or goods produced by employees of the nonprofit organization.

(This amendment provides for up to $1.0 million annually as a credit (exemption) of sales tax for goods purchased by an organization that spends at least 75 percent of gross revenues on program services for disabled persons. A companion revenue amendment reduces GF revenues by $1.0 million per year.)