Communications Taxes FAQs for Localities
What dealer discounts are offered to the providers?
As of June 1, 2010, both the Communications Sales Tax dealer discount and the landline E-911 dealer discount have been repealed.
What distribution percentage is my locality normally entitled to?
The distribution percentage is generally derived from a report generated by the Auditor of Public Accounts (APA).
How is the distribution of communications taxes revenues computed?
After payment of direct costs of administering the communications taxes, payments for the Virginia Relay Center and distributions for franchise fees due to localities, the remaining revenues received from the communications sales tax, the E-911 tax, and the public rights-of-way use fee will be distributed to counties, cities and towns.
When do localities receive their monthly distributions of communications taxes revenues?
The revenues are distributed to counties, cities and towns by the 25th day of the month following the month in which the return is due. For example, the January return is due on February 20, and the January revenues would be distributed by March 25.
What action can a local office take if a service provider is not collecting and remitting the proper amount of communications taxes?
The local office should report the noncompliance to the Department of Taxation. The Department can audit the provider's records, assess for any deficiencies in taxes collected, and provide training to ensure better compliance in the future.
How do localities receive distribution reports? Can a local office view statewide distribution information?
Each locality receives a report of the statewide communications taxes revenues each month, including a breakdown of the communications sales tax, E-911 tax, and public rights-of-way use fees. The report also breaks down the distributions for TAX's administration fee, the Virginia Relay Center, and the total franchise fees paid to localities with cable franchise agreements in effect on January 1, 2007.
Each city, county and town can see the distribution of the remainder of the revenues for their own locality based on the percentage computed by the Auditor of Public Accounts (APA). The report does not include information for other localities. The report is sent to the same individual in each locality who receives the sales and use tax reports.
How does each locality receive its distribution?
The funds are distributed by TAX in the same manner as the retail sales and use tax, except that towns also receive distributions directly.
Can a locality conduct an audit to verify that the cable franchise fee reported by a provider is correct?
Yes. Local revenue officials have the authority to conduct audits to verify that a provider has reported its cable franchise fees correctly.
Can my locality bill more than 0.5 percent to a customer for the Business Professional and Occupational License (BPOL) tax?
No. House Bill 568 repealed the portion of the BPOL tax on the gross receipts of gross receipts of telephone and telegraph companies exceeding 0.5%. Localities can collect up to the 0.5%. For details, see the Guidelines and Rules for the Virginia Communications Taxes.
Do localities still receive the telephone public rights-of-way use fee revenues?
Providers distribute the telephone rights-of-way ("ROW") fee in the same manner they did prior to the passage of HB 568. If a locality maintains their own roads and have imposed a telephone ROW fee, the locality will continue to receive the telephone ROW fee.
How do localities receive their cable franchise fees?
The franchise fees are distributed by TAX as part of each locality's regular monthly distribution, not as separate payments.
Last Updated 1/23/2015 11:2