We are entering our second full week of the 2017 General Assembly. Last week was a very busy week for the retail industry.
ACCELERATED SALES TAX - Action Alert Coming Soon
VRF continues to oppose the changes in the Accelerated Sales Tax threshold as seen in the Governor’s proposed budget. We would like to see the threshold unwind to $10 million in 2017 and $25 million in 2018. Please watch for an Action Alert on this issue in the near future.
ACTIONS TAKEN ON THESE ITEMS:
(H) VOTE: PASSAGE (67-Y 31-N)
(H) Reported form General Laws with amendments (17-Y 5-N)
(H) Subcommittee recommends reporting with substitute (9-Y 0-N)
Sales Tax Holiday
(H) Subcommittee recommends reporting (10-Y 0-N)
(S) Passed by indefinitely in Commerce and Labor (11-Y 2-N 1-A)
(S) Passed by indefinitely in Commerce and Labor (11-Y 3-N)
Paid Family Leave
(S) Passed by indefinitely in Commerce and Labor with letter (14-Y 0-N)
Plastic Bag Tax
(S) Passed by indefinitely in Finance (10-Y 4-N)
Mandates on Signage
(H) Subcommittee recommends laying on the table (suspend indefinitely)
(H) Subcommittee recommends reporting (6-Y 4-N)
(H) Sub-committee recommends reporting with amendments (6-Y 0-N)
*VRF is monitoring closely and will be a part of the working group that is established.
Felony Threshold for Larceny
These two bills were rolled into each other with a $500 threshold and reported out of full committee. We fully expect for this to be defeated in House Courts, Criminal Law Subcommittee.
Click here to view a full list of bills we're tracking.
2017 LEGISLATIVE RECEPTION
We had a wonderful time at our 2017 Legislative Reception at Hilton Richmond Downtown! We had a great turnout and would like to thank all of the elected officials, sponsors, and members of VRF for joining us for such a wonderful evening.
Event Sponsors: Dominion, Hilton Richmond Downtown, Walmart, Target, Altria, The Home Depot, Walgreens, Franco's Fine Clothier, Ruffin & Payne, Inc., Ball Office Products, Good Foods Grocery, InfoTel, Richmond Window Corp., and SignScapes.
2017 GENERAL ASSEMBLY
The 2017 General Assembly Session began last Wednesday, January 11th. Your VRF team has hit the ground running this year, making sure your voice is heard on all issues that impact the retail industry. You can find a list of all the bills we are tracking here. This is a short session, so things will move very quickly. We will keep you up-to-date via our weekly Retail Advocate emails.
Sales Tax Nexus
McAuliffe’s Sales Tax Nexus legislative initiative is one more step towards creating a level playing field for retailers in Virginia. VRF has spent years working toward creating this level playing field for both online and brick and mortar retailers. Therefore, VRF will be out front supporting Senator Hanger’s SB 962 and Delegate Watts’ HB 2058. Both seek to level the playing field by establishing a nexus to Virginia if inventory is stored within the Commonwealth. Thus, if out-of-state retailers store inventory within the Commonwealth, they are required to collect sales and use tax on sales to customers within Virginia.
While e-fairness is our ultimate goal, VRF believes SB 962 and HB2058 are a great step forward for Virginia’s brick and mortar retailers. Both bills have been assigned to the Committee on Finance in their respective Houses. Make your voice heard on this issue by reaching out to members of these committees and state your support for SB 962 to Senate Finance Committee Members and HB 2058 to House Finance Committee Members.
Accelerated Sales Tax
Another issue that will have an impact on Virginia’s retailers is Accelerated Sales Tax. In the Governor’s proposed budget, he seeks to keep the threshold for AST at $2.5 million rather than the planned unwinding to $10 million in 2017. Because of the enormous negative impact on retailers, VRF opposes this aspect of the Governor’s Proposed budget.
We will reach out to you with official legislative action items on these issues at a later date. When you receive a legislative action item, it is your opportunity to make your voice heard on issues that impact your business.
Below are the Governor's proposals that will impact VRF members found in the Governor's Budget Document that was presented on December 16, 2016.
Use Tax Compliance
The State is expected to increase revenue by $2 million by providing guidance on reporting purchases of tangible personal property online or via catalogs through enhanced instructions to tax payers, form changes, vendor guides for electronic filers, presentations to tax professionals and CPAs, and online communication.
Restaurant Inspection Fee
Proposes to increase the Restaurant Inspection Fee from $40 to $285.
Implement Tiered Fee Structure for Food Establishment Inspection Program
Proposes to replace current $40 annual inspection fee with a three-tiered fee structure based on the establishment's square footage; the fee structure will range from $40 to $575.
Additionally, during the Governor's remarks to the Joint Money Committees, he mentioned two important issues to the retail industry:
Accelerated Sales Tax
The Governor proposed that Virginia suspend the unwinding of AST for June 2017. Instead, he proposes that we keep the threshold at $2.5 million in June 2017 and then increase the threshold to $4 million in June of 2018. The Governor stated that this proposal will produce an additional $47.9 million in General Fund revenues.
Sales Tax Nexus
According to the Governor's statement, the Commonwealth is missing out on $250 to $300 million a year while E-fairness legislation remains stalled in Congress. Because of this, the Governor is proposing legislation which will require any out-of-state merchant who uses a fulfillment center or warehouse, located within the commonwealth, to register as a dealer for the collection of sales tax on their sales in Virginia.
In addition to the issues above, we expect to see legislation for minimum wage increase, mandatory paid sick leave, Airbnb, ABC, felony threshold for larceny, cigarette exemption certificate, recycle VA, plastic bag ban/tax, and much more.
Session kicks off January 11, 2017, at 12 pm.
You can expect to receive weekly updates via our Retail Advocate email during the 2017 Session.