VA Tax News

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  • 09 Apr 2021 1:36 PM | Anonymous

    Important Information Regarding Certain Filing and Payment Deadlines in Virginia: New Individual Income Tax Filing and Payment Deadline 

    Individual income tax returns and payments required to be made with such returns for Taxable Year 2020 that were originally due May 1, 2021, are now due on or before May 17, 2021. As a result, no penalties will apply so long as a return is filed and full payment is made by May 17, 2021. In addition, pursuant to Virginia Tax's authority to waive the accrual of interest during a declared state of emergency in the commonwealth, no interest will apply so long as a return is filed and full payment is made by May 17, 2021. 

    The new filing and payment deadline for certain Taxable 2020 returns applies to composite returns filed on behalf of nonresident owners. However, all other Virginia tax payment, withholding, and filing deadlines remain the same, including the requirement for calendar year filers to make their first estimated payments for Taxable Year 2021 by May 3, 2021.

    More information can be found in Tax Bulletin 21-5 and in the Laws, Rules, and Decisions section of our website.  

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.


  • 22 Mar 2021 10:40 AM | Anonymous

    Effective March 11, 2021, Virginia House Bill 2185 and Senate Bill 1403 amend the Code of Virginia to add Va. Code § 58.1-609.14, providing a temporary exemption from the Retail Sales and Use Tax for qualifying purchases of personal protective equipment (PPE).

    The exemption is only valid for qualifying purchases of PPE made on or after March 11, 2021, and prior to the expiration of the last executive order issued by Governor Northam related to the COVID-19 pandemic and the termination of the COVID-19 Emergency Temporary Standard and any permanent COVID-19 regulations adopted by the Virginia Safety and Health Codes Board. No refunds will be provided regarding purchases made prior to March 11, 2021, or after the expiration of the exemption.

    Guidelines for the Retail Sales and Use Tax Exemption for PPE have been published to the Virginia Tax website. For additional information or questions, contact the Virginia Tax Business Customer Service hotline at 804-367-8037.

    View the Tax Guidelines 


  • 15 Mar 2021 4:51 PM | Anonymous

    Important Information Regarding 2020 Virginia Income Tax Returns: Virginia's Conformity to the Internal Revenue Code Advanced to Dec. 31, 2020

    Under emergency legislation enacted by the 2021 General Assembly, Virginia's date of conformity to the terms of the Internal Revenue Code advances from Dec. 31, 2019, to Dec. 31, 2020. This allows Virginia to generally conform to the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Consolidated Appropriations Act (CAA). 

    However, it specifically deconforms from three provisions of the CARES Act that temporarily change limitations applicable to the net operating loss deduction, excess business losses and the business interest deduction. This legislation also deconforms from the provision of the CAA that permanently reduces the medical expense deduction threshold.

    The legislation conforms to the federal tax exemption for Paycheck Protection Program (PPP) loan forgiveness and certain funding received under the Economic Injury Disaster Loan (EIDL) program. However, it partially deconforms from the provision of the CAA that allows taxpayers to claim a federal deduction for business expenses funded by forgiven PPP loan proceeds. Instead, the bill permits a deduction for Taxable Year 2020 of up to $100,000 for business expenses funded by forgiven PPP loan proceeds. In addition, the legislation fully deconforms from the provision of the CAA that allows taxpayers to claim a federal deduction for business expenses funded by certain EIDL funding proceeds.

    The legislation also provides an individual and corporate income tax subtraction for Taxable Year 2020 for up to $100,000 of all grant funds received by a taxpayer under the Rebuild Virginia program.

    Tax Bulletin 21-4 explains the conformity adjustments that may be necessary as a result of this legislation. 

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.


  • 08 Mar 2021 4:31 PM | Anonymous

    Virginia Interest Rates Stay the Same

    Virginia Tax announces that Virginia's interest rates will stay the same for the second quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the second quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the second quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

    Details about these interest rates can be found in Tax Bulletin 21-3 and in the Laws, Rules, and Decisions section of our website.  

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.


  • 25 Feb 2021 8:36 AM | Anonymous

    Additional Sales and Use Tax in Henry County, Virginia

    Virginia Tax is announcing that effective April 1, 2021, a new 1% additional retail sales and use tax will be levied in Henry County, Virginia. The sales and use tax levied will total 6.3%, comprised of the 4.3% state tax, the 1% percent local option tax and the 1% Henry County additional tax.

    Sales made on or after April 1, 2021 will be subject to the new tax rate. Items delivered to a purchaser and paid for on or after April 1, 2021 will be taxed at the 6.3% rate, regardless of when the property was ordered. The increased rate will not apply to property delivered prior to April 1, 2021, but paid for on or after April 1, 2021. Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to April 1, 2021, even though delivery may occur on or after April 1, 2021, or the paid-in-full lease payment covers a lease period beginning on or after April 1, 2021.  

    The rate of tax on food purchased for home consumption and qualifying essential personal hygiene products is unaffected by the law change and will remain at the current 2.5% (1.5% state and 1% local) rate statewide.  

    More information can be found in Tax Bulletin 21-2 and in the Laws, Rules, and Decisions section of our website.  

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8037 for business tax questions.


  • 07 Jan 2021 11:23 AM | Anonymous

    Important Information Regarding Virginia's Litter Tax: Increased Litter Tax Rate and Additional Penalty

    Virginia Tax is notifying taxpayers of changes to the Virginia Litter Tax effective for returns due May 1, 2021.

    The Virginia Litter Tax is imposed annually on each establishment from which business is conducted by certain manufacturers, wholesalers, distributors and retailers.

    Previously, such tax applied at an annual rate of $10 per establishment. Effective for Litter Tax returns due May 1, 2021, this annual rate increases to $20 per establishment.

    An additional litter tax on each establishment is imposed on manufacturers, wholesalers, distributors, and retailers of groceries, soft drinks, carbonated waters, beer and other malt beverages. Under prior law, such tax applied at an annual rate of $15 per establishment. Effective for Litter Tax returns due May 1, 2021, this annual rate for the additional tax increases to $30 per establishment.  

    Under existing law, any taxpayer who fails to pay the Litter Tax by the May 1 deadline is subject to a penalty equal 100% of the tax due. In addition, interest accrues at the rate established pursuant to Va. Code § 58.1-1812. Effective for Litter Tax payments due May 1, 2021, an additional penalty of $100 will apply to any late payments. This new penalty applies in addition to the existing 100% penalty and any interest that may accrue.

    More information can be found in Tax Bulletin 21-1 and in the Laws, Rules, and Decisions section of our website.  

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov or contact us at 804.367.8037 for business tax questions.
  • 10 Dec 2020 9:19 AM | Anonymous

    Virginia Interest Rates Stay the Same

    Virginia Tax announces that Virginia's interest rates will stay the same for the first quarter of 2021. The underpayment and overpayment rates for Virginia taxes are 2% higher than the corresponding federal rates. Federal rates for the first quarter of 2021 are 3% for tax underpayments and 3% for tax overpayments by taxpayers other than corporations. Accordingly, the Virginia rates for the first quarter of 2021 will be 5% for tax underpayments (assessments) and 5% for tax overpayments (refunds).

    Details about these interest rates can be found in Tax Bulletin 20-12 and in the Laws, Rules, and Decisions section of our website.  

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8031 for individual income tax questions and 804.367.8037 for business tax questions.
  • 01 Dec 2020 12:10 PM | Anonymous

    Important Information Regarding Virginia’s Tobacco Products Tax

    Today, Virginia Tax is notifying taxpayers of changes to the state's Tobacco Products Tax recently enacted by the Virginia General Assembly.

    Beginning Jan.1, 2021, heated tobacco products will be taxed at the rate of 2.25 cents per stick for taxable sales or purchases occurring on and after Jan. 1, 2021. Heated tobacco products will not be subject to the stamping requirements imposed on cigarettes under the Virginia Cigarette Tax.

    Additionally, the Virginia General Assembly adopted economic nexus for purposes of the Tobacco Products Tax. Beginning Jan. 1, 2021, a distributor shall be deemed to have sufficient activity within the commonwealth to require registration if such distributor:

    • Receives more than $100,000 in gross revenue from sales of tobacco products in the commonwealth in the previous or current calendar year; or
    • Engages in 200 or more separate tobacco products sales transactions in the commonwealth in the previous or current calendar year.

    More information can be found in Tax Bulletin 20-11 and in the Laws, Rules, and Decisions section of our website.  

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov, or contact the Tobacco Tax Unit at 804.371.0730.


  • 30 Oct 2020 12:31 PM | Anonymous

    Important Information Regarding Virginia’s Enhanced Form 1099-K Filing Requirements

    Virginia Tax is announcing changes to the filing requirements in Virginia associated with Form 1099-K. Virginia law now requires that a payment settlement entity submit to Virginia Tax either (1) a duplicate of each Form 1099-K that it submits to the IRS or (2) a duplicate of each Form 1099-K that it submits to the IRS related to a participating payee with a Virginia state address or that is a Virginia taxpayer. “Payment settlement entities” include:

    • In the case of a payment card transaction, the merchant acquiring entity (defined as the bank or other organization which has the contractual obligation to make payment to participating payees in settlement of payment card transactions); and
    • In the case of a third party network transaction, the third party settlement organization (defined as the central organization which has the contractual obligation to make payment to participating payees of third party network transactions).

    This Virginia filing requirement applies to reportable payment transactions made on or after Jan. 1, 2020.

    In addition, for Virginia tax purposes, third-party settlement organizations must now submit Form 1099-K information to Virginia Tax based on a different threshold than what is imposed for federal tax purposes. 

    • For federal tax purposes, third party settlement organizations are required to submit to the IRS Form 1099-K with respect to third party network transactions of a participating payee, if for the calendar year, reportable payment transactions with the participating payee exceed $20,000 and the total number of transactions with the participating payee exceeds 200.
    • For Virginia tax purposes, third party settlement organizations are now required to submit Form 1099-K information to Virginia Tax to the extent that they make payments of $600 or more in a taxable year to another person who is not an employee in pursuit of the organization’s trade or business.

    This may require certain third-party settlement organizations to report Form 1099-K to Virginia Tax even if they were not required to submit such information to the IRS. Such information is also required to be provided to the participating payee. This enhanced reporting requirement applies only with respect to participating payees with a Virginia mailing address and to reportable payment transactions made on or after Jan. 1, 2020.

    Finally, payment settlement entities are required to submit Form 1099-K information to Virginia Tax electronically.

    More information regarding these requirements, including due dates and the process for requesting a waiver, can be found in Tax Bulletin 20-10 and in the Laws, Rules, and Decisions section of our website.  

    View the Tax Bulletin

    If you have additional questions, go to www.tax.virginia.gov, or contact us at 804.367.8037 for business tax questions.
  • 08 Oct 2020 9:22 AM | Anonymous

    Beginning on Feb. 1, 2021, the new format will allow CPAs to take a variety of different courses and topics to meet the CPE ethics requirement, as long as it is taken from a VBOA-approved provider.

    The two-hour annual CPE requirement will remain the same. All licensees (excluding those approved for the Inactive status) will still be required to complete a VBOA-approved ethics course that complies with VBOA regulation 18VAC5-22-90

    However, CPAs will have a choice of the ethics course they can take to meet the two-hour ethics course CPE requirement. CPAs can take an ethics course that is specific to their line of work or something they prefer.

    Every ethics course must be pre-approved by the VBOA and include the 2021 VBOA Segment. The 2021 VBOA Segment is a 10-minute video that must be added to all approved ethics courses.

    The VBOA will continue to approve all providers and courses ahead of time and it will be the CPAs responsibility to choose an ethics course from a VBOA-approved provider. Providers must submit their ethics course with the VBOA Segment for approval by submitting their course and approval request to the VBOA.  Only approved courses will meet the 2021 Virginia ethics requirement.

    This new format will allow you and other providers to create a course of your choosing. However, the backbone of the course must be focused on ethics but can be told and presented in a variety of ways on a variety of topics.

    Some examples of course topics may include, but are not limited to: 

    • Professional conduct and ethics
    • Ethics in the real world
    • Ethics in tax practice
    • Behavioral ethics
    • Governmental ethics
    • Ethics of industry professionals/CPAs

    2020 format

    Currently, there is only one Virginia-Specific Ethics Course offered each year and all Active Virginia CPAs are required to take the same course. 
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