Retail Sales and Use Tax; dealer discount.

Plain English Breakdown

Checked against official source text during the last sync.

Retail Sales and Use Tax; Dealer Discount

This bill changes the percentages of tax discounts that dealers can receive based on their monthly taxable sales.

What This Bill Does

• Changes the discount rate for dealers with monthly taxable sales between $0 and $30,000 from 4% to 8%
• Reduces the discount rate for dealers with monthly taxable sales between $30,001 and $62,500 from 4% to 2%
• Keeps the discount rate at 1.2% for dealers with monthly taxable sales between $62,501 and $208,000
• Reduces the discount rate for dealers with monthly taxable sales of $208,001 or more from 2% to 0.8%

Who It Names or Affects

• Dealers who sell goods and services in Virginia

Terms To Know

Dealer discount

A reduction given to businesses that collect sales tax on behalf of the state, based on their monthly taxable sales.

Limits and Unknowns

• The bill does not specify how this change will affect dealers subject to electronic funds transfer requirements.
• It is unclear if there are any additional budgetary provisions that might limit or modify these discount percentages.

Official Summary Text

Sales and use tax; dealer discount.
Provides that the state retail sales and use tax dealer discount percentages allowed from the first three percent of such tax imposed shall be (i) eight percent for monthly taxable sales between $0 and $30,000; (ii) four percent for monthly taxable sales between $30,001 and $62,500; (iii) 1.2 percent for monthly taxable sales between $62,501 and $208,000; and (iv) 0.8 percent for monthly taxable sales of $208,001 and above.

Under current statutory law, such dealer discount percentages are (a) four percent for monthly taxable sales between $0 and $62,500; (b) three percent for monthly taxable sales between $62,501 and $208,000; and (c) two percent for monthly taxable sales of $208,001 and above. However, superseding budgetary provisions (1) limit such dealer discount percentages to (A) 1.6 percent for monthly taxable sales between $0 and $62,500; (B) 1.2 percent for monthly taxable sales between $62,501 to $208,000; and (C) 0.8 percent for monthly taxable sales of $208,001 and above and (2) suspend the discount entirely for dealers subject to the electronic funds transfer requirement in relevant law.

Current Bill Text

A BILL to amend and reenact §
58.1-622
of the Code of Virginia, relating to sales and use tax; dealer discount.

Be it enacted by the General Assembly of Virginia:

1. That §
58.1-622
of the Code of Virginia is amended and reenacted as follows:

§
58.1-622
. Discount.

For the purpose of compensating a dealer holding a certificate of registration under §
58.1-613
for accounting for and remitting the tax levied by this chapter, such dealer shall be allowed the following percentages of the first three percent of the tax levied by §§
58.1-603
and
58.1-604
and accounted for in the form of a deduction in submitting his return and paying the amount due by him if the amount due was not delinquent at the time of payment.

Monthly Taxable Sales

Percentage

$0 to
$62,500
$30,000

4%

8%

$62,501
$30,001
to
$208,000
$62,500

3%

4%

$208,001
and above
$62,501
to
$208,000

2%

1.2%

$
208,001
and above

0.8%

The discount allowed by this section shall be computed according to the schedule provided, regardless of the number of certificates of registration held by a dealer.