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2010 Session

Budget Amendments - HB29 (Conference Report)

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Modify Dealer Discount Proposal (language only)

Item 3-5.15 #1c

Item 3-5.15 #1c

Adjustments and Modifications to Tax Collections
Discounts and Allowances

Language
Page 323, strike lines 30 through 35 and insert:
"A. Notwithstanding any other provision of law, effective beginning with the return for June 2010, due July 2010, the compensation allowed under § 58.1-622, Code of Virginia, shall not be available to any dealer required to remit the tax levied under §§ 58.1-603 and 58.1-604, Code of Virginia, by electronic funds transfer pursuant to § 58.1-202.1, Code of Virginia, and the compensation available to all other dealers shall be limited to the following percentages of the first three percent of the tax levied under §§ 58.1-603 and 58.1-604, Code of Virginia:

Monthly Taxable Sales Percentage
$0 to $62,500 1.6%
$62,501 to $208,000 1.2%
$208,001 and above 0.8%

B.  Notwithstanding any other provision of law, effective beginning with the return for June 2010 due July 2010, the compensation available under §§ 58.1-642, 58.1-656, 58.1-1021.03, 58.1-1720, and 58.1-1730, Code of Virginia, shall be repealed.
C.  Notwithstanding any other provision of law, effective on and after July 1, 2010, there shall be no discount available for any discount or allowance allowed under §§ 58.1-2233, 58.1-2236, and 58.1-2256, Code of Virginia."


Explanation
(This amendment modifies provisions of House Bill 29 as introduced which assumed $60.9 million in revenues annually beginning in fiscal year 2011 by eliminating all compensation paid to retailers that collect states sales tax. The amended language would eliminate the dealer discount only for retailers who already are required to remit payment electronically and allow smaller retailers to retain an amount equal to 40 percent of the current discount. The removal of the discount on only those who file electronically would eliminate payments to less than 2 percent of the retailers in the Commonwealth, with the remaining retailers retaining some compensation. For the remainder, the retained percentage would be reduced to 40 percent of the current rate. This would generate $49.1 million each year in fiscal year 2011 and fiscal year 2012 – a loss of $11.8 million compared to House Bill 30 as introduced but would allow more than 98 percent of retailers to retain some compensation.)