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Consumer's Use Tax

This tax is the "other half" of the Virginia Sales and Use Tax Act passed by the 1966 Virginia General Assembly. When you purchase goods, other than magazines or newspaper subscriptions, from a business that does not add the Virginia sales and use tax to your bill or you purchase goods tax-free while outside Virginia, you may be liable for the tax and required to file Form CU-7 to report and pay the tax. This tax is 5.3 percent (6 percent in Northern Virginia and Hampton Roads) of what you paid for the item ("cost price") except for food purchased for home consumption. 'Cost price' does not include separately stated shipping or delivery charges but it does include a 'shipping and handling' charge if listed as a combined item on the sales invoice.

The tax rate is 6 percent in the Northern Virginia Cities of Alexandria, Fairfax, Falls Church, Manassas and Manassas Park; and in the Counties of Arlington, Fairfax, Loudoun and Prince William, and in the Hampton Roads Cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach and Williamsburg, and the Counties of Isle of Wight, James City, Southampton and York.  The rate is 5.3 percent in the rest of Virginia.

Who Should File This Form: If the total amount of purchases was from out-of-state mail order catalog(s) only, and $100 or less for the entire year, you do not have to pay the use tax. If the purchases were from out-of-state mail order catalog(s) and exceed $100, or the purchases were of any amount from sources other than mail order catalogs, then you must report these purchases and pay consumer's use tax on the total amount of all untaxed purchases from all sources made during the calendar year. Nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings are exempt from consumer use tax.

If you meet the above criteria, you must file an annual consumer's use tax return, Form CU-7. This form is for use by individuals only. Businesses, including partnerships and sole proprietorships, must report such purchases on Form ST-7 or Form ST-9, whichever is appropriate.

Filing Alternative: You can report and pay this tax on Schedule ADJ with Form 760, or Schedule 760PY ADJ with Form 760PY.

When And Where To File: If filing based on the calendar year, file your return as soon as possible after January 1, but not later than May 1. If you are filing on a basis other than a calendar year, you must file your return by the 15th day of the 4th month after the close of your taxable year. Penalty and interest will apply if the return is filed late. Pay the balance due as computed on Form CU-7 by the due date. Payment must be attached to the form when filed. Make your check or money order payable to the Virginia Department of Taxation.

Last Updated 7/29/2014 7:30

 

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