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New Cap for 2014 Qualifed Equity and Subordinated Debt Investments Tax Credit

Under the amended budget bill for the 2012-2014 biennium (2014 House Bill 5001) and the budget bill for the 2014-2016 biennium (2014 House Bill 5002), the Qualified Equity and Subordinated Debt Investment Tax Credit cap will increase to $5 million for taxable year 2014.  For taxable years after 2014, the tax credit cap will remain at the statutory cap of $5 million, unless the General Assembly takes future action to change it.  For complete information, see Tax Bulletin 14-5.

Form VA-6 Filing Date Changed to January 31

Under the provisions of the 2014 Appropriations Act, the due date for filing the Employer’s Annual Summary of Virginia Income Tax Withheld and required W-2 and 1099 statements has been changed from February 28 to January 31. The earlier filing date will help to ensure faster and more accurate processing of individual income tax refunds.  The change takes effect for Forms VA-6 and VA-6H for calendar year 2014.  Because January 31, 2015 is a Saturday, the actual due date for the 2014 Form VA-6 and accompanying income statements will be Monday, February 2, 2015.  For details on filing, visit our Withholding Tax page.

Accelerated Sales Tax Update for 2014

Legislation passed by the General Assembly requires Retail Sales and Use Tax dealers who generated taxable sales and purchases of $48.5 million or more for the twelve-month period ending June 30, 2013 to make an accelerated payment.  The payment must be made on or before June 25, 2014 for dealers paying by check, or June 30, 2014 for dealers making electronic payments.  Impacted dealers will be allowed to credit this amount against the amount due with their June 2014 return (due July 21).  Visit our Accelerated Sales Tax page for more information.

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Retail Sales Tax - Electronic Filing and Payment Requirement, Effective July 1, 2013

The 2012-2014 Appropriations Act requires the Virginia Department of Taxation to collect all Retail Sales and Use Tax returns and payments electronically.

  • The new requirement applies only to dealers who file their sales and use tax returns on Forms ST-9 or ST-9CO (Form ST-9CO will be discontinued effective July 1, 2013).
     
  • All dealers will begin filing the new Form ST-9 beginning with the July 2013 return (due August 20, 2013) for monthly and seasonal filers, or the July - September 2013 return (due October 21, 2013) for quarterly filers.
     
  • Dealers who file on a quarterly basis must file and pay electronically beginning with the return for the period of July – September 2013, which is due to be filed by October 21, 2013.  Monthly filers have been required to file and pay electronically since 2012. 
     
  • Dealers who file on a seasonal basis must file and pay electronically beginning with the July 2013 return, due August 20, 2013.
     
  • Returns and payments must be submitted electronically on or before the due date to be considered timely.
     
  • Preprinted sales tax return coupon mailings will be discontinued for all filers effective with the July 2013 returns.

We offer three online filing and payment options: eForms, Business iFile, and Web Upload.

If you are unable to make the necessary changes to file and pay electronically by the effective date, you may request a temporary waiver. Submit your request in writing by completing the Sales Tax Electronic Filing Waiver Request form.

For questions, contact a Customer Service Representative at (804) 367-8037 or by  Live Chat.

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Employer Withholding Tax - Electronic Filing Requirement 

Beginning July 1, 2013, every employer will be required to file all withholding tax returns and payments electronically. This requirement does not change the filing frequency requirements, however, it may change the filing and payment method used. Employers can meet these electronic filing and paying requirements without purchasing tax filing software. We offer several free online services that are available 24 hours a day, seven days a week:

  • eForms currently allows you to file and pay tax returns online, and will also allow you to submit W-2 information later this year.  No sign-up is required to use this system, and the forms look similar to the paper versions.  eForms requires a payment to be made when the return has an amount due.  The payment will be debited via Debit Electronic Funds Transfer (EFT) from the checking account information entered with the return.  Only checking accounts may be used with eForms.  You may also schedule the date of the eForm return and payment.

  • Business iFile allows you to file returns and make payments by Debit EFT.  Once enrolled in Business iFile, enter your tax information, bank information and schedule the date of the payment.

  • Web Upload allows you to file returns with payments and submit Employer W-2s online.  Payments are made by by Debit EFT. Web Upload is “file driven” with the ability to save all return and payment information into a single file layout to submit to the Virginia Department of Taxation.  The system supports Excel, fixed-width (column based) and delimited files. Once you sign-up for Web Upload, you create your file layout and submit your return, payment and bank information.  

  • ACH Credit is used to make electronic payments directly into the state’s bank account. You must contact your financial institution and make arrangements to credit the state’s bank account with funds from your bank account. Your financial institution will advise you of ACH origination services offered and any associated costs.

The Tax Commissioner has the authority to waive the requirement to file and/or pay electronically should this cause an undue hardship for the employer. Requests for waiver must be submitted in writing, by completing the Employer Withholding Electronic Filing Waiver Request form.

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2013 Land Preservation Tax Credit Cap

Previously, it was announced that the indexed tax credit cap for the Land Preservation Tax Credit for calendar year 2013 was $113,909,000.  However, legislation passed by the 2013 General Assembly (House Bill 1398) removed the credit's adjustment for inflation.  Therefore, the cap for calendar year 2013 and years to come has been reduced to $100 million.  Please see Tax Bulletin 13-6 for more information.

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Corporation Income Tax Changes for 2013

Apportionment for Retail Companies: For taxable years beginning on or after July 1, 2012, but before July 1, 2014, retail companies are required to determine their Virginia taxable income by using an apportionment formula with a triple-weighted sales factor. A single sales factor apportionment formula will be phased in over a three-year period beginning as a triple-weighted sales factor, followed by a quadruple-weighted sales factor, and then a single sales factor for taxable years beginning on and after July 1, 2015. See the Schedule 500A Instructions or the 502A Instructions for further information and qualifications.

Manufacturer’s Modified Apportionment Method Phase-In:  Qualifying manufacturers may elect to use a triple-weighted sales factor for taxable years beginning on or after July 1, 2011, but before July 1, 2013.  For taxable years beginning on or after July 1, 2013, but before July 1, 2014, such manufacturers may elect to use a quadruple-weighted sales factor. Such manufacturers may elect to use a single sales factor for taxable years beginning on and after July 1, 2014. See the instructions for Schedule 500A for details on how to apportion income.

Worker Retraining Credit:  2013 legislation increases the maximum credit amount per employee for courses taken at a private school to $200 (or $300 if the retraining is a STEM or STEAM discipline) and adds a sunset date of December 31, 2017 to the tax credit.

Neighborhood Assistance Act Credit:  Effective for taxable years beginning on or after January 1, 2013, the tax credit percentage is increased from 40 percent to 65 percent of the value of donations.  In addition, HB 368 expands the professional services eligible for tax credits to include services provided by mediators certified by the Judicial Council of Virginia.

Port Volume Increase Credit:  New provisions allow the credit to be claimed by a qualifying taxpayer that is an agricultural entity, manufacturing-related entity (manufacturer or distributor of manufactured goods), or mineral and gas entity that uses port facilities in the Commonwealth and increases its port cargo volume by a minimum of 5% at these facilities for taxable years beginning on or after January 1, 2011 but before January 1, 2017.


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Advancement of Virginia's Fixed-Date Conformity to the Internal Revenue Code

Under emergency legislation (House Bill 1085; Chapter 1 of the 2014 Acts of Assembly and Senate Bill 288, Chapter 2 of the 2014 Acts of Assembly) passed by the 2014 General Assembly and signed by Governor McAuliffe, Virginia's conformity to the federal enhanced Earned Income Tax Credit (“EITC”) was extended to taxable years ending before January 1, 2018.

The General Assembly did not advance Virginia’s date of conformity to the Internal Revenue Code.  Therefore, Virginia’s date of conformity remains January 2, 2013.  However, Congress did not enact any federal tax legislation that would impact Virginia after January 2, 2013.  Taxpayers may still use their federal adjusted gross income (or federal taxable income, for corporations) as the starting point for calculating their Virginia taxable income for Taxable Year 2013, except as provided in Tax Bulletin 13-3 (Public Document 13-19 (2/15/2013)) and Tax Bulletin 13-13 (Public Document 13-209 (11/08/2013)).

Tax Bulletin 14-1 provides taxpayers with directions on how to reconcile this legislation and Virginia’s January 2, 2013 date of conformity to the Internal Revenue Code with their 2013 Virginia income tax returns.

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Employer W-2 Electronic Filing Requirements

All employers are required to file their annual withholding statements, Forms W-2 , electronically with the Virginia Department of Taxation.  Currently, the Web Upload online system supports electronic W-2 filing.  Later this year, the eForms system will also support electronic W-2 submissions.  The Department no longer accepts W-2s filed on CD, diskette or tape (also known as magnetic media).

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Pass-Through Entity Electronic Filing

The Department of Taxation's e-File program will begin accepting Form 502 for taxable year 2013 through the Fed/State e-File program.  The e-File system is supported by numerous commercial software programs.  Check with your software vendor to see if they support e-Filing Form 502.

If a tax payment is required, the payment can be made through the e-File system as a direct debit or you may pay with an ACH Credit established through the Pass-Through Entity's (PTE’s) bank. The e-File program provides many benefits to PTEs:

• Supports filing the federal and state returns electronically at the same time.

• The federal return is automatically provided to the state electronically.

• Supports unified filings.

• Supports attaching Portable Document Format (PDF) copies of required documentation.

• The ability to schedule a tax payment via direct debit on a future date, when filing before the due date.

In order to successfully e-File, the PTE must:

• Use an approved commercial e-File software program.

• Be able to create a readable PDF. This means that you must either have a scanner that allows you to scan documents into a PDF file or another program that allows you to save files in a PDF format

 For paper filers, the Department offers a free and easy electronic submission process for filing VK-1s. You no longer have to print; package and mail your VK-1s. Simply upload your electronically stored VK-1 data using Web Upload. While we encourage you to use Web Upload to submit your VK-1s, the Form 502 return and Schedules 502ADJ and 502A must still be filed on paper. There is no problem with submitting the VK-1s via Web Upload and the return and schedules on paper, simply mark the “VK1s filed via Web Upload” box on the Form 502. Visit Web Upload for additional information.

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Cigarette Revenue Stamping Agents Update

The Virginia Department of Taxation recently switched cigarette revenue stamp vendors.  House Bill 5002 (2014 Special Session I, Acts of Assembly Chapter 2) requires the Department to provide a report to the General Assembly regarding incidients arising during Virginia tax stamping operations.  If you are a permitted stamping agent, please report stamping operation exceptions resulting in costs equal to or greater than $500.00 that occur on or after April 1, 2014 to our Hotline at (804) 367-8209.  Costs include damaged stamps, loss of productvity due to heat application setting modifications, and financial technical assistance required to modify heat application operations.

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Last Updated 7/28/2014 16:13

 

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