Virginia Tax Commissioner Craig M. Burns has announced that Virginia will provide extensions and penalty waivers to individuals and businesses in Florida and Georgia who are unable to meet their filing and payment obligations because of Hurricane Irma.

Outlined in Tax Bulletin 17-12, income tax returns and estimated payments with an original or extended due date between the first day of the disaster* and January 31, 2018 will be granted a waiver of late filing and late payment penalties if the returns and payments are filed on or before March 2, 2018.

* September 4, 2017 in Florida and September 7, 2017 in Georgia

The Virginia Board of Accountancy (VBOA) announced a major update involving individual and firm licenses and their expiration date. The Virginia Society of CPAs (VSCPA) and the VBOA have agreed that this change requires an update to the 2017 Virginia-specific Ethics course. To that end, the VSCPA is working diligently to incorporate the change as quickly as possible into the course.

On Friday, July 7, you will receive a new PowerPoint that will include a new introductory video with an explanation of the change that takes place on July 1, 2017. Additionally, you will also receive a one-page handout that should be given to your CPE takers in addition to the current manual. We also recommend that you reach out to your previous Ethics takers who have taken classes prior to this change to make them aware.

Starting July 1, 2017, the additional 12-month period for late renewals ends. Unrenewed licensees will automatically go into Expired status the day after the renewal is due.

Under emergency legislation (House Bill 1521; Chapter 1 of the 2017 Acts of Assembly) passed by the 2017 General Assembly and signed by Governor McAuliffe on February 3, 2017, Virginia's fixed-date of conformity to the terms of the Internal Revenue Code will advance from December 31, 2015, to December 31, 2016.  Tax Bulletin 17-1 provides taxpayers with directions on how to reconcile this legislation with their 2016 Virginia income tax returns.  This legislation allows Virginia to conform to federal tax legislation enacted during 2016 that would impact the filing of Virginia income tax returns, including the United States Appreciation for Olympians and Paralympians Act of 2016.

Virginia will continue to disallow federal income tax deductions for bonus depreciation allowed for certain assets under Internal Revenue Code (“IRC”) §§ 168(k), 168(l), 168(m), 1400L and 1400N; the five-year carryback of federal net operating loss deductions generated in Taxable Year 2008 or 2009; federal income tax deductions for applicable high yield discount obligations under IRC § 163(e)(5)(F); and federal income tax exclusions related to cancellation of debt income realized in connection with a reacquisition of business debt at a discount after December 31, 2008, and before January 1, 2011.

Tax Bulletin 17-1 can be found on the Department’s website by clicking here.

The 2016 Legislative Summary has been released.  The full text of the Legislative Summary can be found on the Department's website in the "Facts and Figures" section or by clicking here. 

The Legislative Summary is published by the Department of Taxation as a convenient reference guide to state and local tax legislation enacted by the 2016 Session of the General Assembly, including the reconvened session on April 20, 2016.  Please note that any legislation enacted after this date is not included.  The Summary includes a general description of enacted legislation affecting:

• State taxes administered by the Department, and
• Local taxes for which the Department assists with administration or on which the Department renders advisory assistance.

References to chapter numbers are to the corresponding chapters in the Acts of Assembly, which may be viewed at: http://lis.virginia.gov.  Effective dates of the legislation vary and are set out in each description.

In general, legislation affecting taxes administered by other state agencies is not included in the Summary.

The Summary is intended to provide a synopsis of enacted legislation and is for informational purposes only.  The Summary is not a substitute for the actual state law, local ordinances, or tax related regulations. 

To view the full text of the Legislative Summary, click here. 

If you have additional questions, please visit the Department's website at http://www.tax.virginia.gov, or contact the Department at (804) 367-8031 for individual income tax questions or (804) 367-8037 for business tax questions.

Our Customer Services Walk-In Center, located at 1957 Westmoreland St. in Richmond, will close for the 2016 individual income tax filing season on Friday, May 27. Until then, the center is open 8:30 a.m. to 5 p.m., Monday through Friday. For walk-in assistance, please arrive no later than 4:30 pm. 

The Cashiers' Office at the same location is open year-round to receive tax payments, sell tobacco stamps, and receive tax returns.

To get help by phone year-round, call our Customer Contact Center, 8:30 a.m. to 5 p.m., Monday through Friday.

• Individual income taxes: (804) 367-8031
• Business taxes: (804) 367-8037

Effective April 22, 2016, dealers are no longer required to collect sales and use tax on prepared meals, catering, and labor related to preparing and serving food purchased by nonprofit organizations, churches, state agencies, and local governments that have Virginia sales tax exemption certificates and meet certain requirements. 

In order for the purchases to qualify for the exemption, the nonprofit organization, church, or government entity must demonstrate all of the following:

• The provision of prepared meals, catering, and related services supports a function, mission, service, or purpose of the organization.
• The charge for prepared meals, catering, and services is billed to and paid for by the organization claiming the sales tax exemption.
• The organization that claims the exemption controls when, how, and who consumes the prepared food or catered meals.   

The Department of Taxation is not issuing new nonprofit exemption certificates at this time. New certificates will be issued when organizations renew their sales tax exemption. Instead, the department is sending letters explaining this policy change to all organizations holding department-issued nonprofit exemption certificates.

Organizations should provide the letter along with their exemption certificate when purchasing prepared meals, catering, or related services from dealers. 

For more information, see Tax Bulletin 16-3 “Important Information Regarding Meals and Catering Purchased by Nonprofit Organizations, Churches, and Governmental Entities” on the department’s website. 

The Virginia Department of Taxation is sending “Review of Tax Return” letters (AUIN073A RAP Additional Review) to some taxpayers to verify withholding information. Because of the increase in identity theft and refund fraud, we’re taking extra precautions this year to validate the refund returns we process.  

Processing of tax returns could take longer as we work to protect taxpayer information and ensure that taxpayers receive the state income tax refunds to which they are entitled.

We understand that taxpayers may be concerned if they receive a Review of Tax Return letter. Receiving the letter does not mean they are victims of identity theft or that their returns contain errors or missing data. It just means that their returns were stopped for review. 

If your clients receive this letter, they should read it carefully to determine what action they might need to take.

Please let your clients know the following:  

• If they did not submit an individual income tax return, they should check where indicated in the first paragraph of the letter and return it using the fax number or address provided.
• If they did file a return, they should follow the instructions in the letter and submit all requested documents as soon as possible by fax or mail. We will continue processing returns once we receive all requested documents and confirm that their returns are correct. Please allow 7 business days for us to receive the documents. 
• If they filed a return and already received their refunds, or receive one before sending us the requested information, we were able to verify their returns through other means. We no longer need documentation from them, and they may disregard the letter.

We’re asking taxpayers for their patience during the filing season. We take identity theft and tax refund security seriously and must take the time necessary to verify that the refunds we're processing are correct. It could take 8-10 weeks after submitting all requested documents for taxpayers to receive their refund. If it’s been longer than this, please have them contact us.

Governor McAuliffe Signs Bill 

Advancing Date of Income Tax Conformity 

to December 31, 2015 

If you have additional questions, please visit the Department's website at http://www.tax.virginia.gov, or contact the Department at (804) 367-8031 for individual income tax questions or (804) 367-8037 for corporate income tax questions.

It's time to file!

Corporation Income Tax returns (Form 500) are due electronically on or before Dec. 15, 2015 from:

• Fiscal year filers whose taxable year ends on Aug. 31, 2015.
• Fiscal year filers whose taxable year ends on Feb. 28, 2015 and who are filing under Virginia’s automatic six-month extension. 

Virginia Automatic Extension: Virginia grants an automatic six-month extension from the original due date to file Form 500. However, the extension doesn't allow for extra time to pay any taxes that are owed. Corporate taxpayers should pay any tentative tax due using Form 500CP (Virginia Automatic Extension Payment) when the return is due. Penalty and/or interest may apply if the tentative tax due wasn't paid by the original date the return was due. A penalty may apply to returns filed during the extension period if less than 90 percent of the return's total tax liability was paid by the original due date.  

Electronic Filing Mandate:  All corporations are required to file estimated tax payments, annual income tax returns and final payments electronically. If this requirement causes undue hardship, you may request a waiver by submitting the Virginia Corporation Electronic Filing Waiver Request form. 

For details regarding Corporation Income Tax extensions and penalties or for information on how to file and pay electronically, visit our Corporation Income Tax web page. 

It’s very important that we maintain accurate information regarding your business. Please use our Business iFile to: 

• Tell us if you close your business or a specific business location
• Update your account with address or contact changes
• Add a new tax to your account
• Let us know you are no longer liable for a specific tax.  

It's time to file!

Pass-Through Entity Return of Income and Return of Nonresident Withholding Tax (Form 502) is due on Dec. 15, 2015 from: 

• Fiscal year filers whose taxable year ends on Aug. 31, 2015.
• Fiscal year filers whose taxable year ends on Feb. 28, 2015 and who are filing under Virginia’s automatic six-month extension. 

Virginia Automatic Extension: Virginia grants an automatic six-month extension from the original due date to file Form 502. However, the extension doesn't allow for extra time to pay any taxes that are owed. Taxpayers should pay any tentative tax due using Form 502W (Pass-Through Entity Withholding Tax Payment) at the time the return is due. Penalty and/or interest may apply if the tentative tax due wasn't paid by the original date the return was due. A penalty may apply to returns filed during the extension period if less than 90 percent of the return's total tax liability was paid by the original due date. 

Reminder: All pass-through entities are required to file the annual income tax return and make all payments electronically.  If the electronic filing requirement causes undue hardship, taxpayers may request a waiver by submitting the Virginia Pass-Through Entity Electronic Filing Waiver Request form. 

For details regarding extensions and penalties or for information on how to file and pay electronically, visit our Pass-Through Entity web page. 

It’s very important that we maintain accurate information regarding your business. Please use our Business iFile to: 

• Tell us if you close your business or a specific business location
• Update your account with address or contact changes
• Add a new tax to your account
• Let us know you are no longer liable for a specific tax