Virginia Law

A. 1. a. In addition to the sales tax authorized under § 58.1-605, any county or city not located in Planning District 8, may levy a general retail sales tax at a rate not to exceed one percent as determined by its governing body to provide revenue solely for capital projects for the construction or renovation of schools serving each such county or city. Such tax shall be added to the rates of the state and local sales tax imposed by this chapter and shall be subject to all the provisions of this chapter and the rules and regulations published with respect thereto. No discount under § 58.1-622 shall be allowed on this local sales tax.

b. Any tax imposed pursuant to this subsection shall expire (i) if the capital projects for the construction or renovation of schools are to be financed by bonds or loans, on the date by which such bonds or loans shall be repaid or (ii) if the capital projects for the construction or renovation of schools are not to be financed by bonds or loans, on a date chosen by the governing body and specified in any resolution passed pursuant to the provisions of subdivision 2 a. Such expiration date shall not be more than 20 years after the date of the resolution passed pursuant to the provisions of subdivision 2 a.

2. a. The tax authorized by this subsection may be levied only if the tax is approved in a referendum within the county or city held in accordance with § 24.2-684 and initiated by a resolution of the local governing body. Such resolution shall state (i) if the capital projects for the construction or renovation of schools are to be financed by bonds or loans, the date by which such bonds or loans shall be repaid or (ii) if the capital projects for the construction or renovation of schools are not to be financed by bonds or loans, a specified date on which the sales tax shall expire.

b. The clerk of the circuit court shall publish notice of the referendum in a newspaper of general circulation in the county or city once a week for three consecutive weeks prior to the election. The question on the ballot for the referendum shall include language stating (i) that the revenues from the sales tax authorized by this subsection shall be used solely for capital projects for the construction or renovation of schools and (ii) the date on which the sales tax shall expire.

3. The governing body of the county or city, if it elects to impose a local sales tax under this section after approval at a referendum as provided in subdivision A 2 shall do so by the adoption of an ordinance stating its purpose and referring to this subsection and providing that such ordinance shall be effective on the first day of a month at least 120 days after its adoption. Such ordinance shall state the date on which the sales tax shall expire. A certified copy of such ordinance shall be forwarded to the Tax Commissioner so that it will be received within five days after its adoption.

4. Any local sales tax levied under this subsection shall be administered and collected by the Tax Commissioner in the same manner and subject to the same exemptions and penalties as provided for the state sales tax; however, the local sales tax levied under subsection A 1 a shall not be levied on food purchased for human consumption or essential personal hygiene products, as such terms are defined in § 58.1-611.1.

5. All local sales tax moneys collected by the Tax Commissioner under this subsection shall be paid into the state treasury to the credit of a special fund that is hereby created on the Comptroller's books for each county or city under the name "Collections of Additional Local Sales Taxes in ____ (INSERT NAME OF THE COUNTY OR CITY)." Each fund shall be administered as provided in § 58.1-605. A separate fund shall be created for each county or city. Only local sales tax moneys collected pursuant to this subsection in that county or city shall be deposited in that county's or city's fund.

6. As soon as practicable after the local sales tax moneys pursuant to this subsection have been paid into the state treasury in any month for the preceding month, the Comptroller shall draw his warrant on the State Treasurer in the proper amount in favor of each county or city, and such payments shall be charged to the account of the county or city under its special fund created by subdivision A 5. If errors are made in any such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers or to some other fact, the errors shall be corrected and adjustments made in the payments for the next two months as follows: one-half of the total adjustment shall be included in the payment for each of the next two months. In addition, the payment shall include a refund of amounts erroneously not paid to each county or city and not previously refunded during the three years preceding the discovery of the error. A correction and adjustment in payments described in this subsection due to the misallocation of funds by the dealer shall be made within three years of the date of the payment error.

7. The revenues from the tax authorized in this subsection shall be used solely for capital projects for new construction or major renovation of schools serving the county or city, including bond and loan financing costs related to such construction or renovation.

B. 1. a. In addition to the sales tax authorized under § 58.1-605, any county or city that is located in Planning District 8 may levy a general retail sales tax at a rate not to exceed one percent as determined by its governing body to provide revenue solely for (i) capital projects for the construction or renovation of schools serving each such county or city, or (ii) public transportation purposes serving such county or city or (iii) both capital projects for the construction or renovation of schools serving each such county or city, and public transportation purposes serving each such county or city. Such tax shall be added to the rates of the state and local sales tax imposed by this chapter and shall be subject to all the provisions of this chapter and the rules and regulations published with respect thereto. No discount under § 58.1-622 shall be allowed on this local sales tax.

b. Any taxing authority authorized by subsection B 1 a of § 58.1-605.1 shall expire for any county or city that does not comply with the provisions of § 33.2-3404.

2. a. A tax pursuant to this subsection may be levied only if the tax is approved in a referendum within the county or city held in accordance with § 24.2-684 and initiated by a resolution of the local governing body.

b. The clerk of the circuit court shall publish notice of the referendum in a newspaper of general circulation in the county or city once a week for three consecutive weeks prior to the election. The question on the ballot for the referendum shall include language stating that the revenues from the sales tax authorized by subsection B 1 a shall be used solely for public transportation or for capital projects for the construction or renovation of schools.

3. The governing body of the county or city, if it elects to impose a local sales tax under subsection B 1 a after approval at a referendum as provided in subdivision B 2 shall do so by the adoption of an ordinance stating its purpose and referring to this subsection and providing that such ordinance shall be effective on the first day of a month at least 120 days after its adoption. A certified copy of such ordinance shall be forwarded to the Tax Commissioner so that it will be received within five days after its adoption.

4. Any local sales tax levied under this subsection shall be administered and collected by the Tax Commissioner in the same manner and subject to the same exemptions and penalties as provided for the state sales tax; however, the local sales tax levied under subsection B 1 a shall not be levied on food purchased for human consumption or essential personal hygiene products, as such terms are defined in § 58.1-611.1.

5. All local sales tax moneys collected by the Tax Commissioner under subsection B 1 a shall be paid into the state treasury to the credit of a special fund that is hereby created on the Comptroller's books for each county or city under the name "Collections of Additional Local Sales Taxes in __ (INSERT NAME OF THE COUNTY OR CITY)." Each fund shall be administered as provided in § 58.1-605. A separate fund shall be created for each county or city. Only local sales tax moneys collected pursuant to subsection B 1 a in that county or city shall be deposited in that county's or city's fund.

6. As soon as practicable after the local sales tax moneys authorized by subsection B 1 a have been paid into the state treasury in any month for the preceding month, the Comptroller shall draw his warrant on the State Treasurer in the proper amount in favor of each county or city, and such payments shall be charged to the account of the county or city under its special fund created by subsection B 5. If errors are made in any such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers or to some other fact, the errors shall be corrected and adjustments made in the payments for the next two months as follows: one-half of the total adjustment shall be included in the payment for each of the next two months. In addition, the payment shall include a refund of amounts erroneously not paid to each county or city and not previously refunded during the three years preceding the discovery of the error. A correction and adjustment in payments described in this subsection due to the misallocation of funds by the dealer shall be made within three years of the date of the payment error.

7. The revenues from the tax pursuant to this subsection shall be used solely for (i) capital projects for new construction or major renovation of schools serving each such county or city, including bond and loan financing costs related to such needs, or (ii) public transportation purposes serving such county or city, including bond and loan financing costs related to such needs, or (iii) both capital projects for the new construction or renovation of schools serving each such county or city and public transportation purposes serving such county or city. Appropriate uses of such revenues shall include bond and loan financing costs related to clauses (i), (ii), and (iii). Revenues from this tax shall not be used for repayment of existing indebtedness authorized by the county or city for public school capital projects that began or were completed prior to the imposition of such tax.

2019, c. 648; 2020, cc. 327, 427, 428, 705, 708, 865; 2026, Sp. Sess. I, c. 1.