New tax laws take effect July 1; here’s a look at some of them

The majority of the legislation passed this year by the Virginia General Assembly will go into effect July 1.

A number of new laws will impose or impact taxes, fees or fines; below are some of the most notable ones:

• HB 1541 creates the Central Virginia Transportation Authority. Starting Oct. 1, an additional 0.7% sales tax will be administered in Henrico, Charles City, Chesterfield, Goochland, Hanover, New Kent and Powhatan counties, as well as the City of Richmond and the Town of Ashland, in order to fund the CVTA.

• HB 534 and SB 11 authorize any county or city, beginning January 1, 2021, to impose a tax for disposable plastic bags used by retailers at a rate of five cents per bag. The revenue from the tax is required to be used for certain purposes, including environmental cleanup and the provision of reusable bags.

• HB 342 exempts sellers at farmers markets or roadside stands from collecting meals tax on their sales, provided their total annual income from such sales does not exceed $2,500.

• The 2020 Appropriation Act (HB 30) doubles the tax rate for any product currently subject to the tobacco product tax. It also imposes a tax rate of $0.066 per ML of liquid nicotine.

• HB 785 and SB 588 grant counties the same power awarded to cities and towns to impose their own taxes.

• HB 839 and SB 93 exempt the 12 victims of the May 2019 mass shooting in Virginia Beach from probate taxes on their wills. It also orders refunds for any taxes paid on those wills prior to July 1.

• HB 307 and SB 931 increase the maximum amount of tax subtraction for rewards from crime-stopper organizations from $1,000 to $5,000 for each taxable year.

• SB 590 extends the expiration date of tax credits for equipment used in recycling processes to Jan. 1, 2025. It also includes machinery for “advanced recycling” in the tax credit. Advanced recycling is defined by the American Chemistry Council as the process of converting used plastics to their “basic chemical building blocks”.

• HB 888 and SB 268 create a sales tax exemption for gun safes sold for $1,500 or less. A gun safe is defined as a commercially available safe or vault designed for the storage of a firearm or ammunition that has a digital, analog or biometric locking mechanism. Glass-faced cabinets are excluded from this exemption.

• HB 881 and SB 971 established administrative procedures, licensing frameworks and operation requirements for electronic gaming devices and established the COVID-19 Relief Fund. 84% of the revenue from these gaming devices will be allocated to the COVID-19 Relief Fund, with 2% going to the Problem Gambling Treatment and Support Fund, 2% going to the Virginia ABC Authority and 12% going to localities in which the devices are located. Any distributor found to be in violation of these directions is subject to a fine of $25,000 to $50,000 per incident.

• HB 466 authorizes localities with a population of greater than 50,000 to waive license requirements for businesses with a total gross income of $200,000 or less per year.

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