Virginia’s General Assembly made several noteworthy changes to the Commonwealth’s tax laws during the 2015 Session. Below we have highlighted some, but not all, of these changes. The focus has been more on state level taxes. Unless otherwise stated, the legislative changes are effective July 1, 2015. Additional information regarding specific tax law changes may be obtained from your Keiter advisor.
Below we highlight a few of our favorites. More detailed information on these and other changes follows.
Refund Checks are Back!!
For individual income tax returns for 2015, taxpayers will be able to receive their refunds by check again!
Conformity to IRC – Tax Compliance Simplified
Virginia advanced its fixed-date conformity to the Internal Revenue Code to December 31, 2014. This means that, with limited exceptions, Virginia follows the federal rules, which makes tax compliance a little easier.
Keeping VA Green
The sunset date for the green job creation tax credit was extended from January 1, 2015 to January 1, 2018. This credit is for $500 for each new “green job” created in the state with a salary of $50,000.
The income tax credit for recyclable materials processing machinery and equipment was extended another 5 years and the amount of the credit was increased from 10 to 20 percent of the purchase price of qualifying equipment. Other changes were made to make it easier to qualify for the credit. But, the total credits available each year is limited to $2 million beginning with tax credits in taxable year 2015.
Withholding Tax Filing Relief for Small Employers
Small employers with no more than five employees may request a waiver from the Tax Commissioner to report their withholding on a less frequent basis, from semi-weekly filing to monthly.
Disaster Relief Assistance
Out-of-state concerns assisting with certain disaster relief efforts in the state will be exempt from tax reporting/remittance requirements.
Help for Dealers Selling to Others for Resale
The Department of Taxation may disclose whether a person is registered to collect the retail sales and use tax. This will help dealers who are selling to others for resale verify the purchaser’s eligibility for the resale exemption and ease compliance burdens.
Accelerated Payments of Sales Tax
Dealers or permit holders with taxable sales and purchases of $2.5 million or greater for the twelve month filing period ending June 30, 2014 will be subject to the accelerated payment requirements for sales tax in June 2015. The requirement had been applicable to dealers with $26 million or more in sales/purchases. Thus, more taxpayers will be subject to the accelerated payment provisions.
For Lessors of Tangible Personal Property – Clarification that Finance Charges not Taxable
While not new, clarity is always good. Finance charges, carrying charges, service charges, or interest charges from credit extended on the lease or rental under conditional lease, conditional rental, or other conditional contracts providing for the deferred payments of the lease or rental of tangible personal property are not included in the gross proceeds subject to the sales tax.
Motor Vehicle Transfers from Kids to Parents
Under current law transfers to a spouse or child are not subject to the motor vehicle sales and use tax. Effective 7/1/15, kids can transfer a motor vehicle to a parent without incurring the tax.
Local Tax Filings Made Easier
Localities will be allowed to create separate classes of property for local tax purposes which may help ease filing requirements and provide tax breaks to others.
For more information on these and other changes, download our detailed report.
This content is intended to communicate general information therefore you should not interpret the statements to be written tax advice or rely on the statements for any purpose.