TITLE 58.1. TAXATION.

§ 58.1-113 added.
Reporting to the Department of Taxation; nonprofit hospitals. Requires nonprofit hospitals to provide to the Department of Taxation a copy of any federal 990 or 990-EZ tax form filed with the Internal Revenue Service. The bill would require nonprofit hospitals to also provide to the Department a copy of any interim tax forms, reports, or returns filed with or provided to the Internal Revenue Service. The bill would require all such returns and information to be provided within 30 days of the same being filed with or provided to the Internal Revenue Service. HB 2022; CH. 746.

§ 58.1-301 amended.
Taxation; conformity with Internal Revenue Code. Conforms the Commonwealth's system of taxation with the Internal Revenue Code, when applicable, as of December 31, 2006. HB 1696; CH. 59 (effective 2/19/07)/ SB 1105; CH. 782 (effective 3/23/07).

§ 58.1-312 amended.
Abusive income tax avoidance transactions; statute of limitations. Extends from three years to six years the period in which the Department of Taxation may assess income tax for any tax return filed based in whole or in part on an abusive tax avoidance transaction. An "abusive tax avoidance transaction" means a transaction that has been identified by the Tax Commissioner as such a transaction and that has been published by the Tax Commissioner. HB 2920; CH. 524.

§§ 58.1-321 and 58.1-322 amended.
Individual income tax; filing threshold amounts. Increases the filing thresholds for the state income tax for individuals to $11,250 in 2008, $11,650 in 2010, $11,950 in 2012; and for married persons to $22,500 in 2008, $23,300 in 2010, and $23,900 in 2012. The bill also increases the personal exemption amount to $930 in 2008. HB 3022; CH. 527/SB 778; CH. 543.

§ 58.1-322 amended.
Income tax; deduction for unreimbursed organ donation expenses. Provides an income tax deduction for unreimbursed expenses that are paid by an organ and tissue donor and that have not been taken as a medical deduction on the taxpayer's federal income tax return, effective for taxable years beginning on or after January 1, 2007. The amount of the deduction is the lesser of $5,000 or the actual amount paid by the taxpayer. HB 2220; CH. 636.

§ 58.1-322 amended.
Income tax deduction; Virginia College Savings Plan. Increases from $2,000 to $4,000 the annual income tax deduction allowed for purchases and contributions for prepaid tuition contracts or savings trust accounts entered into with the Virginia College Savings Plan. The increase would become effective for taxable years beginning on or after January 1, 2009. SB 785; CH. 942.

§ 58.1-322 amended.
Individual income taxes. Provides that income and loss of an electing small business corporation (S corporation) subject to Virginia's bank franchise tax shall be excluded by the shareholders of such S corporation in computing individual income taxes. However, such shareholders would be subject to the individual income tax on any distributions received from such S corporation. SB 1283; CH. 359.

§ 58.1-339.7 amended.
Residential tax credit; increased accessibility and visitability for the disabled. Requires the Department of Housing and Community Development to develop guidelines establishing the eligibility requirements for the tax credit in § 58.1-339.7. Changes the name of the disabled tax credit to the "Livable Home Tax Credit" and extends it to any taxpayer who purchases a new residence. This bill is a recommendation of the Virginia Disability Commission. HB 2498; CH. 68.

§ 58.1-339.7 amended.
Residential tax credit; increased accessibility and visitability for the disabled. Requires the Department of Housing and Community Development to develop guidelines establishing the eligibility requirements for the tax credit in § 58.1-339.7. Changes the name of the disabled tax credit to the "Livable Home Tax Credit" and extends it to any taxpayer who purchases a new residence. The bill would cap the tax credit at $500 for the purchase of a new residence or for the retrofitting of an existing residence. This bill is a recommendation of the Virginia Disability Commission. SB 791; CH. 765.

§ 58.1-344.3 amended.
Voluntary contributions of refunds; Spay and Neuter Fund. Distributes a contribution made to the Spay and Neuter Fund through the voluntary contribution of tax refunds to the locality in which the filer resides. The locality must use the contribution for the provision of low-cost spay and neuter surgeries or it may make the funds available to any private, nonprofit sterilization program for dogs and cats in the locality. All contributions to the Spay and Neuter Fund are currently distributed to the Virginia Federation of Humane Societies. HB 2525; CH. 69.

§ 58.1-344.3 amended.
Voluntary contributions of tax refunds; new organizations. Adds public library foundations and Celebrating Special Children, Inc. to the list of organizations that may receive contributions for taxpayer refunds. The organizations will be added to the bottom of the list of other organizations waiting to appear on the income tax return. HB 2602; CH. 70.

§ 58.1-344.3 amended.
Income tax; checkoff for Department for the Aging. Establishes an income tax check off for income tax refund contributions to the Department for the Aging to be used for Medicare Part D counseling. This would be in addition to the current check off for income tax refund contributions to the Department for the Aging for providing transportation services to the elderly. SB 954; CH. 601.

§§ 36-55.63 and 58.1-435 amended.
Low-income housing credit; consolidation of Code sections. Consolidates provisions of the low-income housing tax credit currently appearing in Titles 36 (Housing) and 58.1 (Taxation). The bill would consolidate the tax credit provisions into § 58.1-435 and provide a cross-reference to the tax credit in § 36-55.63. SB 1054; CH. 778.

§ 58.1-439.7 amended.
Income tax credit for machinery and equipment for processing recyclable materials; extend sunset. Extends the sunset for the income tax credit for purchase of machinery and equipment for processing recyclable materials from January 1, 2007, to January 1, 2015. The bill also makes the credit available to individual income tax filers. Credits earned by a pass-through entity are to be allocated in proportion to each individual's ownership in the pass-through entity. HB 3044; CH. 529 (effective - see bill).

§ 58.1-439.7 amended.
'Income tax credits; machinery and equipment used in recycling process. Extends the sunset date from January 1, 2007, to January 1, 2015, for the income tax credit for machinery and equipment used to produce goods from recyclable materials. The bill would also make the credit available to individual income taxpayers. Currently, only corporate income taxpayers may claim the credit. SB 870; CH. 593 (effective - see bill).

§ 58.1-472 amended.
Withholding tax; filing returns. Allows employers to submit their withholding tax returns on the 25th day of the following month rather than the 20th day, effective January 1, 2008. HB 2284; CH. 753 (effective 1/1/08).

§ 58.1-478.1 added.
Withholding taxes; information furnished. Provides that no person filing a withholding tax return for an organization, through use of an electronic medium, would be required to provide his social security number for such purposes. However, such person would be required to provide his name, social security number, wages, and taxes withheld in any file or batch report that includes the same information for all employees of the organization. SB 862; CH. 770.

§§ 58.1-486.1 and 58.1-486.2 added.
Withholding tax; pass-through entities. Requires pass-through entities to withhold and remit to the Tax Commissioner an amount equal to five percent of the allocable Virginia taxable income of all nonresident owners of the pass-through entity. A nonresident owner may take as a credit against Virginia income tax due his or its allocable Virginia income tax withheld and remitted to the Tax Commissioner by the pass-through entity. SB 1238; CH. 796.

§§ 58.1-540, 58.1-811, 58.1-3237.1, 58.1-3257, 58.1-3292.1, 58.1-3381, 58.1-3506.2, and 58.1-3818.
See §15.2-912.1; HB 2928.

§§ 58.1-602 and 58.1-609.3 amended.
Sales and use tax; commercial and industrial exemptions; railroad rolling stock. Provides an exemption from the sales and use tax for railroad rolling stock when sold or leased by the manufacturer. HB 2148; CH. 751.

§§ 2.2-1514, 10.1-1188, 15.2-2317 through 15.2-2327, 15.2-2403, 15.2-4839, 15.2-4840, 33.1-3, 33.1-13, 33.1-19.1, 33.1-23.03, 33.1-23.03:8, 33.1-223.2:12, 33.1-268, 33.1-269, 33.1-277, 46.2-694, 46.2-694.1, 46.2-697, 46.2-1135, 58.1-605, 58.1-606, 58.1-811, 58.1-2217, 58.1-2249, 58.1-2289, 58.1-2403, 58.1-2425, 58.1-2701, and 58.1-2706 amended; §§ 15.2-2223.1, 15.2-2328, 15.2-2329, 15.2-2403.1, 15.2-4838.1, 30-278 through 30-282, 33.1-23.4:01, 33.1-391.6 through 33.1-391.15, 46.2-206.1, 46.2-702.1, 46.2-755.1, 46.2-755.2, 46.2-1167.1, 58.1-625.1, 58.1-802.1, 58.1-815.4, 58.1-1724.2 through 58.1-1724.7, 58.1-2402.1, 58.1-2531, 58.1-3221.2, and 58.1-3825.1 added.
Transportation funding and reform. Provides (i) statewide funding of transportation projects through current funds and additional funds, (ii) authority to the Northern Virginia Transportation Authority and the Hampton Roads Transportation Authority to impose regional fees and taxes for transportation in their respective areas, (iii) authority to each locality embraced by either Authority to impose an additional real property tax on commercial property with the revenues to be used for transportation, and (iv) several administrative and efficiency reforms impacting transportation. The bill also authorizes the Commonwealth Transportation Board to issue bonds in an aggregate amount not to exceed $3 billion for statewide transportation funding with the debt service on such bonds to be paid from one-third of the annual revenues from the state tax on insurance businesses. HB 3202; CH. 896.

§§ 58.1-609.1, 58.1-625, and 58.1-626 amended.
Sales tax exemption; energy-efficient products. Provides a sales tax exemption for purchases of certain Energy Star qualified products with a sales price of $2,500 or less made during a four-day period each year in mid-October. The bill also authorizes dealers to absorb the sales and use tax on all other items sold during the same time period and thereby relieve the purchasers of the obligation to pay such tax. Dealers who absorb such taxes are liable for payment of the same to the Tax Commissioner. The sales tax holiday would expire in July of 2012. HB 1678; CH. 176/SB 867; CH. 817.

§ 58.1-609.6 amended.
Sales and use tax exemption; textbooks withdrawn from inventory. Extends from July 1, 2008, to July 1, 2012, the sunset date of the current sales and use tax exemption for textbooks and educational materials distributed by publishers to professors at no cost. HB 1674; CH. 58/SB 999; CH. 604.

§ 58.1-609.10 amended.
Sales and use tax; exemption for alternative fuel-burning stoves. Provides an exemption from the retail sales and use tax beginning July 1, 2007, and ending July 1, 2012, for multifuel heating stoves used by the individual purchaser for heating his residence. Such stoves are capable of burning a variety of alternative fuels, including, but not limited to, shelled corn, wood pellets, cherry pits, and olive pits. HB 1640; CH. 84.

§ 58.1-609.10 amended.
Sales and use tax exemption; churches. Expands the sales and use tax exemption for property purchased by churches to (i) property used in caring for or maintaining property owned by the church including, but not limited to, mowing equipment, and (ii) building materials installed by the church and for which the church does not contract with a person or entity to have installed. HB 2724; CH. 758.

§ 58.1-609.11 amended.
Sales and use tax exemption; nonprofit entities. Requires nonprofit entities seeking sales and use tax exempt status that have annual gross receipts of at least $1 million to provide the Department of Taxation with a financial audit performed by an independent certified public accountant and those with annual gross receipts between $750,000 and $1 million to provide the Department with a financial audit or a financial review by an independent certified public accountant. HB 2545; CH. 698.

§ 58.1-609.11 amended.
Sales and use tax; tax exemption for nonprofit entities. Requires nonprofit entities seeking sales and use tax exempt status that have annual gross receipts of at least $750,000 but less than $1 million to provide the Department of Taxation with a financial audit or review performed by an independent certified public accountant. Entities with gross annual receipts of $1 million or greater must file an audit. HB 3062; CH. 704/SB 743; CH. 709.

§§ 58.1-625 and 58.1-626 amended; § 58.1-611.3 added.
Sales and use tax exemption; hurricane preparedness equipment. Provides a sales and use tax exemption, beginning in 2008, for certain hurricane preparedness equipment purchased during a seven-day period each year beginning on May 25. The sales and use tax holiday will sunset on July 1, 2012. SB 1167; CH. 608.

§ 58.1-648 amended.
Communications sales and use tax exemption for military base customers; emergency. Provides an exemption from the communications sales and use tax for customers on any federal military bases or installations when a franchise fee is payable to the federal government. HB 2723; CH. 811 (effective 1/1/07).

§ 58.1-802 amended.
Recordation tax. Clarifies that the tax rate is applied to the greater of the consideration paid or the value of the interest conveyed. HB 2059; CH. 748/SB 822; CH. 768.

§ 58.1-811.
See § 13.1-1002; HB 2292/SB 794.

§ 58.1-1505 amended.
Aircraft sales and use tax; deferral/exemption. Provides an exemption from the aircraft sales and use tax for aircraft that are (i) considered Warbirds, manufactured and intended for military use, excluding those manufactured after 1954, and (ii) used only for (a) exhibit or display to the general public and otherwise used for educational purposes (including such flights as are necessary for testing, maintaining, or preparing such aircraft for safe operation), or (b) airshow and flight demonstrations (including such flights necessary for testing, maintaining, or preparing such aircraft for safe operation). SB 1172; CH. 610.

§§ 58.1-1803 and 58.1-1821 amended.
Collection of taxes by the Department of Taxation. Prohibits the Department of Taxation from engaging debt collectors outside the Department to collect taxes that are less than 90 days delinquent, and requires the Department to provide on the initial assessment notice to the taxpayer of the taxpayer's rights to apply to the Tax Commissioner for a correction in the assessment and the right to have the Tax Commissioner refrain from actions to collect the tax after receipt from the taxpayer of notice of intent to file for such correction. HB 2135; CH. 750 (effective 3/23/07).
§§ 58.1-2289, 58.1-3660, and 58.1-3664. See § 10.1-404; HB 3113/SB 1403.

§§ 58.1-3210, 58.1-3213, and 58.1-3215 amended; § 58.1-3211.1 added.
Real estate tax relief for the elderly and permanently and totally disabled. Authorizes local governments to extend real estate tax relief to dwellings jointly held between individuals not all of whom are at least age 65 or permanently and totally disabled. The tax relief would be prorated based upon the percentage of ownership interest in the dwelling held by all joint owners who are at least age 65 or permanently and totally disabled. As a condition of the property qualifying for real estate tax relief, the bill establishes additional net worth thresholds that cannot be exceeded. The additional net worth thresholds would not allow any exclusion for the dwelling in question. SB 1265; CH. 357.

§ 58.1-3211 amended.
Real property tax exemptions; elderly and disabled. Increases the income limit for elderly and disabled taxpayers in certain Northern Virginia localities from $72,000 to $75,000 for real property tax exemptions. HB 1744; CH. 60.

§ 58.1-3211 amended.
Real estate tax relief; elderly and permanently and totally disabled. Increases from $52,000 to $62,000 the income limit in certain cities and counties for eligibility for elderly and permanently and totally disabled real estate tax relief programs. SB 788; CH. 587.

§ 58.1-3221.2 added.
Classification of real property; energy-efficient buildings. Permits localities to tax certain energy-efficient buildings, not including the land on which they are located, at a lower tax rate than that imposed on the general class of real property by creating a separate classification for taxation purposes. An energy-efficient building is any building that exceeds the energy efficiency standards prescribed in the Virginia Uniform Statewide Building Code by 30 percent. Energy-efficient building certification shall be determined by any qualified licensed engineer or contractor who is not related to the taxpayer and who shall certify to the taxpayer that he has qualifications to provide the certification. HB 2618; CH. 328.

§ 58.1-3221.2 added.
Classification of real property; energy-efficient buildings. Permits localities to tax certain energy-efficient buildings, not including the land on which they are located, at a lower tax rate than that imposed on the general class of real property by creating a separate classification for taxation purposes. An energy-efficient building is any building that exceeds the energy efficiency standards prescribed in the Virginia Uniform Statewide Building Code by 30 percent. Energy-efficient building certification shall be determined by any qualified licensed engineer or contractor who is not related to the taxpayer and who shall certify to the taxpayer that he has qualifications to provide the certification. SB 1051; CH. 354.

§ 58.1-3321 amended.
Real estate tax; limitation on tax rate. Increases from seven to 14 days the minimum notice that a locality must give the public of a public hearing in which the locality proposes to increase its total real estate tax levies more than 101% of the prior year's tax levies, and requires that such notice be posted in the building where the governing body of the locality ordinarily meets, as well as in a newspaper. SB 1063; CH. 948.

§ 58.1-3330 amended.
Real property tax; change in assessment notice. Provides that a notice of the change in the assessment of real estate does not have to include certain information for changes due to construction of or additions to improvements on real estate. HB 3093; CH. 344.

§ 58.1-3330 amended.
Notice of change in assessment. Provides that if a change in assessment arises solely from the construction or addition of new improvements, then notice of such change in assessment need not set out the new tax rate or the percentage change in the new tax levy from the immediately prior one. It also provides that such notice may omit reference to districts for those localities that have elected by ordinance to prepare land and personal property books in alphabetical order. SB 848; CH. 353.

§ 58.1-3506 amended.
Tangible personal property; separate classification for wireless broadband service providers. Creates a separate classification for local taxation purposes for tangible personal property owned and used by certain providers of wireless broadband Internet service in providing such service. HB 2385; CH. 322.

§§ 58.1-3506 and 58.1-3916 amended.
Tangible personal property; classifications. Establishes a separate class of tangible personal property for aircraft that are (i) considered Warbirds, manufactured and intended for military use, excluding those manufactured after 1954, and (ii) used only for (a) exhibit or display to the general public and otherwise used for educational purposes (including such flights as are necessary for testing, maintaining, or preparing such aircraft for safe operation), or (b) airshow and flight demonstrations (including such flights necessary for testing, maintaining, or preparing such aircraft for safe operation). HB 2013; CH. 88/SB 1171; CH. 609.

§ 58.1-3507 amended.
Machinery and tools tax; idle machinery and tools. Provides a uniform statewide statutory classification and taxation for idle machinery and tools on a prospective basis by allowing such machinery and tools to be taxed as capital as long as they have not been used for at least one year prior to tax day or they have been identified in writing by the taxpayer to the commissioner of the revenue as machinery and tools that the taxpayer intends to withdraw from service prior to the next tax day. HB 2181; CH. 191 (effective 1/1/07)/SB 1151; CH. 159 (effective 1/1/07).

§ 58.1-3523 amended.
Personal Property Tax Relief Act definitions. Adds to the definition of "qualifying vehicle" those vehicles that are held in a private trust for nonbusiness purposes by an individual beneficiary. HB 1880; CH. 314.

§ 58.1-3523 amended.
Personal Property Tax Relief Act of 1998. Requires the commissioner of the revenue to rely upon the information at the Department of Motor Vehicles in determining whether a vehicle qualifies for tax relief, unless he has information that the Department's registration information is incorrect or incomplete. HB 2975; CH. 815.

§ 58.1-3713 amended.
Severance tax; extends sunset date. Extends the sunset date from December 31, 2007, to December 31, 2012, for the local coal and gas road improvement tax. HB 1628; CH. 57/SB 734; CH. 586.

§ 58.1-3732 amended.
Business, professional, occupational license tax; motor fuels tax exemption. Clarifies that the motor fuels tax is exempt from gross receipts for purposes of the BPOL tax. HB 1695; CH. 85 (effective 1/1/01).

§ 58.1-3732 amended.
Business, professional, occupational license tax; motor fuels tax exemption. Clarifies that the motor fuels tax is exempt from gross receipts for purposes of the BPOL tax. The bill would be retroactively effective January 1, 2001. SB 772; CH. 834.

§ 58.1-3819 amended.
Transient occupancy tax; Amherst County. Authorizes Amherst County to impose the local transient occupancy tax at a rate of five percent with the revenues in excess of two percent designated for tourism and marketing of tourism initiatives. SB 811; CH. 767.

§ 58.1-3819 amended.
Transient occupancy tax; Northampton County. Authorizes Northampton County to impose a transient occupancy tax at a rate up to five percent, with any revenues collected in excess of two percent to be used for tourism and marketing of tourism initiatives. HB 1714; CH. 86/SB 904; CH. 596.

§ 58.1-3825.
See § 3.1-22.30; HB 1834.

§ 58.1-3921 amended.
Duties of treasurers. Requires treasurers to make out a list of uncollected balances of previously billed tangible personal property taxes on vehicles that (i) were owned by taxpayers, now deceased, upon whose estates no qualification has been made, or (ii) were transferred to bona fide purchasers for value without knowledge, on the part of the persons so transferring, of the unpaid taxes. HB 2390; CH. 867.