Virginia Law

A. 1. a. The governing body of a county or city not located in Planning District 8 may levy a use tax at the rate of such sales tax under subsection A 1 a of § 58.1-605.1 to provide revenue for capital projects for the construction or renovation of schools serving such county or city. Such tax shall be added to the rates of the state and local use tax imposed by this chapter and shall be subject to all the provisions of this chapter, and all amendments thereof, and the rules and regulations published with respect thereto, except that no discount under § 58.1-622 shall be allowed on a local use tax.

b. The governing body of a county or city located in Planning District 8 may levy a use tax at the rate of such sales tax under subsection B 1 a of § 58.1-605.1 to provide revenue for capital projects for the construction or renovation of schools or for public transportation purposes. Such tax shall be added to the rates of the state and local use tax imposed by this chapter and shall be subject to all the provisions of this chapter, and all amendments thereof, and the rules and regulations published with respect thereto, except that no discount under § 58.1-622 shall be allowed on a local use tax.

2. a. Any tax imposed pursuant to subsection A 1 a 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 subsection B. Such expiration date shall not be more than 20 years after the date of the resolution passed pursuant to the provisions of subsection B.

b. Any tax imposed pursuant to subsection A 1 b shall expire for any county or city that does not comply with the provisions of § 33.2-3404.

B. The governing body of the county or city, if it elects to impose a local use tax under subsection A 1 a or subsection B 1 a may do so only if it has previously imposed the local sales tax authorized by subsection A 1 a or subsection B 1 a of § 58.1-605.1, by the adoption of an ordinance stating its purpose and referring to subsection A 1 a or subsection A 1 b and providing that the local use tax shall become effective on the first day of a month at least 120 days after its adoption. Such ordinance for a tax imposed under subsection A 1 a shall state the date on which the use 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.

C. Any local use tax levied under this section 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 use tax; however, the local use tax levied under this section 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.

D. The local use tax authorized by this section shall not apply to transactions to which the sales tax applies, the situs of which for state and local sales tax purposes is the county or city of location of each place of business of every dealer paying the tax to the Commonwealth without regard to the county or city of possible use by the purchasers. However, the local use tax authorized by this section shall apply to tangible personal property purchased outside the Commonwealth for use or consumption within the county or city imposing the local use tax, or stored within the county or city for use or consumption, where the property would have been subject to the sales tax if it had been purchased within the Commonwealth. The local use tax shall also apply to leases or rentals of tangible personal property where the place of business of the lessor is outside the Commonwealth and such leases or rentals are subject to the state tax. Moreover, the local use tax shall apply in all cases in which the state use tax applies.

E. Out-of-state dealers who hold certificates of registration to collect the use tax from their customers for remittance to the Commonwealth shall, to the extent reasonably practicable, in filing their monthly use tax returns with the Tax Commissioner, break down their shipments into the Commonwealth by counties and cities so as to show the county or city of destination. If, however, the out-of-state dealer is unable accurately to assign any shipment to a particular county or city, the local use tax on the tangible personal property involved shall be remitted to the Commonwealth by such dealer without attempting to assign the shipment to any county or city.

F. Local use tax revenue shall be deposited in the special fund established pursuant to subsection A 5 or subsection B 5 of § 58.1-605.1. The Comptroller shall distribute the revenue to the county or city.

G. 1. The revenues from the tax authorized by subsection A 1 a 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.

2. The revenues from the tax authorized by subsection A 1 b 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 each 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 each 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.