58.1-605 - To what extent and under what conditions cities and counties may levy local sales taxes; collection thereof by Commonwealth and return of revenue to each city or county entitled thereto.
§ 58.1-605. To what extent and under what conditions cities and counties maylevy local sales taxes; collection thereof by Commonwealth and return ofrevenue to each city or county entitled thereto.
A. No county, city or town shall impose any local general sales or use tax orany local general retail sales or use tax except as authorized by thissection.
B. The council of any city and the governing body of any county may levy ageneral retail sales tax at the rate of one percent to provide revenue forthe general fund of such city or county. Such tax shall be added to the rateof the state sales tax imposed by §§ 58.1-603 and 58.1-604 and shall besubject to all the provisions of this chapter and the rules and regulationspublished with respect thereto. No discount under § 58.1-622 shall be allowedon a local sales tax.
C. The council of any city and the governing body of any county desiring toimpose a local sales tax under this section may do so by the adoption of anordinance stating its purpose and referring to this section, and providingthat such ordinance shall be effective on the first day of a month at least60 days after its adoption. A certified copy of such ordinance shall beforwarded to the Tax Commissioner so that it will be received within fivedays after its adoption.
D. Any local sales tax levied under this section shall be administered andcollected by the Tax Commissioner in the same manner and subject to the samepenalties as provided for the state sales tax.
E. All local sales tax moneys collected by the Tax Commissioner under thissection shall be paid into the state treasury to the credit of a special fundwhich is hereby created on the Comptroller's books under the name"Collections of Local Sales Taxes." Such local sales tax moneys shall becredited to the account of each particular city or county levying a localsales tax under this section. The basis of such credit shall be the city orcounty in which the sales were made as shown by the records of the Departmentand certified by it monthly to the Comptroller, namely, the city or county oflocation of each place of business of every dealer paying the tax to theCommonwealth without regard to the city or county of possible use by thepurchasers. If a dealer has any place of business located in more than onepolitical subdivision by reason of the boundary line or lines passing throughsuch place of business, the amount of sales tax paid by such a dealer withrespect to such place of business shall be treated for the purposes of thissection as follows: one-half shall be assignable to each politicalsubdivision where two are involved, one-third where three are involved, andone-fourth where four are involved.
F. As soon as practicable after the local sales tax moneys have been paidinto the state treasury in any month for the preceding month, the Comptrollershall draw his warrant on the Treasurer of Virginia in the proper amount infavor of each city or county entitled to the monthly return of its localsales tax moneys, and such payments shall be charged to the account of eachsuch city or county under the special fund created by this section. If errorsare made in any such payment, or adjustments are otherwise necessary, whetherattributable to refunds to taxpayers, or to some other fact, the errors shallbe corrected and adjustments made in the payments for the next six months asfollows: one-sixth of the total adjustment shall be included in the paymentsfor the next six months. In addition, the payment shall include a refund ofamounts erroneously not paid to the city or county and not previouslyrefunded during the three years preceding the discovery of the error. Acorrection and adjustment in payments described in this subsection due to themisallocation of funds by the dealer shall be made within three years of thedate of the payment error.
G. Such payments to counties are subject to the qualification that in anycounty wherein is situated any incorporated town constituting a specialschool district and operated as a separate school district under a townschool board of three members appointed by the town council, the countytreasurer shall pay into the town treasury for general governmental purposesthe proper proportionate amount received by him in the ratio that the schoolage population of such town bears to the school age population of the entirecounty. If the school age population of any town constituting a separateschool district is increased by the annexation of territory since the lastestimate of school age population provided by the Weldon Cooper Center forPublic Service, such increase shall, for the purposes of this section, beadded to the school age population of such town as shown by the last suchestimate and a proper reduction made in the school age population of thecounty or counties from which the annexed territory was acquired.
H. One-half of such payments to counties are subject to the furtherqualification, other than as set out in subsection G above, that in anycounty wherein is situated any incorporated town not constituting a separatespecial school district which has complied with its charter provisionsproviding for the election of its council and mayor for a period of at leastfour years immediately prior to the adoption of the sales tax ordinance, thecounty treasurer shall pay into the town treasury of each such town forgeneral governmental purposes the proper proportionate amount received by himin the ratio that the school age population of each such town bears to theschool age population of the entire county, based on the latest estimateprovided by the Weldon Cooper Center for Public Service. The precedingrequirement pertaining to the time interval between compliance with electionprovisions and adoption of the sales tax ordinance shall not apply to atier-city. If the school age population of any such town not constituting aseparate special school district is increased by the annexation of territoryor otherwise since the last estimate of school age population provided by theWeldon Cooper Center for Public Service, such increase shall, for thepurposes of this section, be added to the school age population of such townas shown by the last such estimate and a proper reduction made in the schoolage population of the county or counties from which the annexed territory wasacquired.
I. Notwithstanding the provisions of subsection H, the board of supervisorsof a county may, in its discretion, appropriate funds to any incorporatedtown not constituting a separate school district within such county which hasnot complied with the provisions of its charter relating to the elections ofits council and mayor, an amount not to exceed the amount it would havereceived from the tax imposed by this chapter if such election had been held.
J. It is further provided that if any incorporated town which would otherwisebe eligible to receive funds from the county treasurer under subsection G orH of this section be located in a county which does not levy a general retailsales tax under the provisions of this law, such town may levy a generalretail sales tax at the rate of one percent to provide revenue for thegeneral fund of the town, subject to all the provisions of this sectiongenerally applicable to cities and counties. Any tax levied under theauthority of this subsection shall in no case continue to be levied on orafter the effective date of a county ordinance imposing a general retailsales tax in the county within which such town is located.
(Code 1950, §§ 58-441.49, 58-441.49:2; 1966, c. 151; 1968, c. 638; 1982, c.555; 1984, cc. 675, 695; 1997, cc. 245, 725; 2004, Sp. Sess. I, c. 3; 2007,c. 896; 2008, cc. 484, 488; 2010, cc. 386, 629.)