Update on tax legislation

January 28, 2016

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On January 27, the House Finance Committee’s Subcommittee #2 heard and subsequently failed to pass HB 92 (Cole) and HB 85 (Campbell), bills supported by VACo.

HB 92 (Cole) authorizes localities to withhold interest on refunds of local taxes that are the result of an erroneous assessment caused by the taxpayer’s failure to file a license application or tax return prior to the filing deadline. Under current law, localities that elect to impose interest on delinquent taxes must also pay interest at the same rate on overpayments due to erroneously assessed taxes. Interest on delinquent taxes can accrue beginning no earlier than the first day following the day such taxes are due, and may not exceed 10 percent per year. Local governing bodies may impose interest at a rate not to exceed the rate of interest established in the Internal Revenue Code, or 10 percent annually, whichever is greater, for the second and subsequent years of delinquency. Similar bills HB 469 (Head) and HB 1144 (Cole) were incorporated into HB 92.

HB 85 (Campbell) authorizes all counties to impose a local cigarette tax at a rate limited to 5 cents per pack or the amount levied under state law, whichever is greater. All cities and towns with general taxing powers are already currently authorized to impose a cigarette tax with no rate limitations.

VACo appreciates all the support from localities on these bills.

VACo Contact: Beau Blevins

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