“Luckily, Kay Gotshall and Ryan Beethoven-Wilson, CPAs at Keiter, a Glen Allen-based accounting firm, have come up with an analysis that should help guide sellers and buyers.
First of all, they summarized the rules governing four buying scenarios:
- Tangible personal property both paid for and delivered after July 1, 2013, will be subject to the higher tax rates, regardless of when it is ordered.
- Tangible personal property delivered before July 1, but paid for after July 1 will not be subject to the higher tax rates.
- Tangible personal property delivered after July 1, but paid for prior to July 1 will not be subject to the higher tax rates.
- A sale or lease payment that may be delivered after July 1, but is paid for in full will not be subject to the higher tax rates.
The CPAs also note businesses may have long-term contracts for renting property or constructing tangible property that were signed before the effective date of the increased tax rates. “In those situations, the legislation provides for a refund of the additional tax if certain conditions are met,” they say.”
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.