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.
SEEKING TO DELAY
The DOL's new rule on overtime will go into effect December 1, 2016. However, the House recently passed legislation that seeks to delay the effective date of the new rule until June 2017.
While this is a great step forward, this legislation still must pass in the Senate. There is not much time for the Senate to get the legislation passed before December 1st. This is because Congress has adjourned until after the election. The Senate will essentially have 6 voting days to get this legislation passed. The likelihood of it passing in that short amount of time isn't great, but there is always a possibility.
Plan for the new rule to be effective as of December 1, 2016.