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Energy Star Sales Tax Holiday FAQs

When will Virginia’s Energy Star and WaterSense Sales Tax Holiday take place?

The Energy Star and WaterSense Sales Tax Holiday for 2014 is scheduled to begin at 12:01 a.m. on Friday, Oct. 10, and to end at midnight on Monday, Oct. 13.

Will the Energy Star and WaterSense Sales Tax Holiday take place every year?

Yes.  The Energy Star and WaterSense Sales Tax Holiday will be a recurring event, beginning at 12:01 a.m. on the Friday before the second Monday in October of every year and ending at midnight on the Monday immediately following.  The annual Energy Star and WaterSense Sales Tax Holiday will expire on July 1, 2017.

What Energy Star items will be exempt from the retail sales and use tax during the Energy Star and WaterSense Sales Tax Holiday?

Exempt items include: any dishwasher, clothes washer, air conditioner, ceiling fan, compact fluorescent light bulb, dehumidifier, or refrigerator that satisfies the following requirements:

  • Has been designated by the United States Environmental Protection Agency and the United States Department of Energy as meeting or exceeding each such agency’s requirements under the Energy Star program;
  • Has a selling price of $2,500 or less per item; and
  • Is purchased for noncommercial or personal use

Do programmable thermostats qualify for exemption as Energy Star qualified products?

Although the statute granting the sales tax holiday exemption lists programmable thermostats as qualifying items, the Energy Star specification for programmable thermostats has been suspended, and the Energy Star label is no longer available for this category.

Will all Energy Star products be labeled as such in the stores?

Yes.  Every Energy Star qualified product is affixed with an Energy Star label on the product itself or on the product’s packaging.  However, every Energy Star product that is so labeled will not qualify for the Energy Star Sales Tax Holiday.  Only those Energy Star dishwashers, clothes washers, air conditioners, ceiling fans, compact fluorescent light bulbs, dehumidifiers, and refrigerators, with a selling price of $2,500 or less per item, and that are purchased for noncommercial or personal use will be eligible for exemption during the Energy Star Sales Tax Holiday.

Energy Star Logo

Where can I find a list of Energy Star qualified items?

A list of Energy Star items can be found at the following website: www.energystar.gov.  Note that not all items that are listed on the website will qualify for the Virginia Energy Star Sales Tax Holiday.  Only those dishwashers, clothes washers, air conditioners, ceiling fans, compact fluorescent light bulbs, dehumidifiers, or refrigerators, with a selling price of $2,500 or less per item, that have been purchased for noncommercial or residential use will qualify for the sales tax holiday exemption.

I notice that clothes dryers and freezers are not listed among the Energy Star qualified items?  Can I purchase a stackable washer and dryer affixed with the Energy Star label, or a refrigerator/freezer combination affixed with the Energy Star label exempt during the Energy Star and WaterSense Holiday period?

Yes.  If items qualifying for the exemption are sold together with merchandise that does not qualify for the exemption as a single unit, such as a stackable washer and dryer or a refrigerator and freezer combination, the full unit will qualify for the Energy Star and WaterSense Sales Tax Holiday, provided the price of the full unit does not exceed $2,500.  If an item qualifying for the exemption is sold as a package with an item that does not qualify for the exemption, such as a separate washer and dryer, sold as a set, the full package price will be subject to the sales tax, even if the collective price of the items falls below the Energy Star Holiday required threshold cost.

Do geothermal heat pumps qualify as Energy Star products for purposes of the sales tax holiday?

No.  Geothermal heat pumps are not air conditioners, as intended by the General Assembly.  Therefore, they do not qualify as Energy Star products for purposes of the sales tax holiday.

What are WaterSense qualified items?

WaterSense qualified items are those items that have been recognized as being water efficient by the WaterSense program sponsored by the U.S. Environmental Protection Agency, as indicated by a WaterSense label.

What  types of items qualify as WaterSense items, exempt from the retail sales and use tax during the Energy Star and WaterSense Sales Tax Holiday?

WaterSense qualified items include such products as bathroom sink faucets, faucet accessories such as aerators, showerheads, toilets, urinals, and landscape irrigation controllers.  Provided these products are affixed with a WaterSense label, they will qualify for exemption during Virginia’s Energy Star and WaterSense sales tax holiday.

Will all WaterSense products be labeled as such in the stores?

Yes.  As with Energy Star qualified products, every WaterSense qualified product is affixed with a WaterSense label on the product itself or on the product’s packaging.  Every WaterSense product that is so labeled will not qualify for the sales tax holiday.  Only those WaterSense products with a selling price of $2,500 or less per item that are purchased for noncommercial or personal use will be eligible for exemption during the Energy Star and WaterSense Sales Tax Holiday.

Where can I find a list of WaterSense qualified items?

A list of WaterSense items can be found at the following website: www.epa.gov/watersense/index.htm.  Note that not all items that are listed on the website will qualify for the Virginia Energy Star and WaterSense Sales Tax Holiday.  Only those items with a selling price of $2,500 or less per item that have been purchased for noncommercial or residential use will qualify for the sales tax holiday exemption.

The WaterSense website lists showerheads and urinals as WaterSense products.  Do these products qualify for exemption during the Sales Tax Holiday?

Yes.  The Environmental Protection Agency has designated certain showerheads and urinals as WaterSense products.  Provided these items are affixed with the WaterSense label, they will qualify for exemption during the Energy Star and WaterSense Sales Tax Holiday.

The WaterSense website lists landscape irrigation controllers as WaterSense products.  Do these products qualify for exemption during the sales tax holiday?

Yes.  The Environmental Protection Agency has designated certain landscape irrigation controllers as WaterSense products.  Provided these items are affixed with the WaterSense label, they will qualify for exemption during the Energy Star and WaterSense Sales Tax Holiday. 

If I purchase items that do not qualify for exemption during the holiday, how much sales tax do I owe?

Effective July 1, 2013, the rate of the state Retail Sales and Use Tax increased from 4% to 4.3%.  The rate of the local option Retail Sales and Use Tax remains 1%.  Thus, the total rate of the tax increased from 5% to 5.3%.  A new additional 0.7% regional sales tax is now imposed in the Hampton Roads and Northern Virginia regions.  Therefore, the total state, local and regional sales tax in these areas is 6%.

Which localities are in the Hampton Roads region?

The Hampton Roads region includes the Counties of Isle of Wight, James City, Southampton, and York and the Cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg.

Which localities are in the Northern Virginia region?

The Northern Virginia region includes the Counties of Arlington, Fairfax, Loudoun, and Prince William and the Cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park.

Can I purchase used appliances affixed with the Energy Star or WaterSense label exempt of the retail sales and use tax during the Energy Star Holiday?

Yes.  There is no requirement that qualifying items be new, when purchased, to qualify for the Energy Star or WaterSense Holiday exemption. 

I am a used appliance dealer, who carries some of the items that qualify for exemption during the Energy Star and WaterSense Sales Tax Holiday?  Must I participate in the holiday? 

Yes.  All retailers who sell qualifying items must participate in the Energy Star and WaterSense Sales Tax Holiday.  Retailers carrying qualifying items are not permitted to elect not to participate on the sale of qualifying items.  Any dealer who collects the sales or use tax on nontaxable transactions must remit to the Department of Taxation such erroneously or illegally collected tax unless he can show that the tax has been refunded to the purchaser or credited to the purchaser’s account.

I am a dealer who sells both items that qualify for the exemption and items that do not.  May I absorb the tax on all items that do not qualify for the exemption during the sales tax holiday?

Yes.  During the Energy Star and WaterSense Sales Tax Holiday and the fourteen days immediately preceding the start of the holiday, dealers may advertise that during the holiday, they plan to absorb the tax on any or all nonqualifying items.  The dealer is responsible for remitting that tax to the Department of Taxation.

Does the location from which items are purchased have any bearing on their eligibility as Energy Star or WaterSense Qualified products

No.  So long as the items satisfy the Energy Star or WaterSense qualifications, are purchased for noncommercial or residential use, and have a selling price of $2,500 or less per item, the item will be eligible for exemption during the Energy Star Sales Tax Holiday.  It does not matter, for example, whether compact fluorescent light bulbs (CFLs) are purchased from a hardware store, a grocery store, or a convenience store.

Can customers use a manufacturer’s coupon to reduce the sales price of an item for purposes of determining whether an item falls under the $2,500 cap for Energy Star or WaterSense products during the holiday period?

No.  Unlike the sales tax holiday for clothing and school supplies and hurricane preparedness, a manufacturer’s coupon or third party coupon will NOT constitute a reduction in sales price for purposes of the Energy Star and WaterSense Sales Tax Holiday.  During the Energy Star and WaterSense Holiday, the value of the manufacturer’s coupon is added to the amount paid to determine the selling price.

What specific purchases are not eligible for exemption during the Energy Star and WaterSense Holiday?

  • Purchases intended for commercial use.
  • Purchases made by a real property contractor in order to satisfy a real property improvement contract, under which the contractor has agreed to furnish materials, supplies, and necessary services in exchange for an agreed upon price.  In such a case, the Energy Star or WaterSense product is purchased for commercial use and does not qualify for the exemption.
  • Purchases made by a developer who purchases appliances for use in residential homes the developer has built, as these purchases will be deemed commercial purposes.
  • Custom orders placed during the Energy Star and WaterSense Holiday period.
  • Rental items, regardless of whether the items are rented and paid for during the sales tax holiday period.
  • Items that are not affixed with the Energy Star or WaterSense labels.
  • Toilet bowls or toilet tanks, purchased separately, where one of the components is not designated as a WaterSense product.

Can a customer purchase an extended warranty, providing for the provision of repair parts and labor exempt during the Energy Star and WaterSense Holiday, as long as the item purchased under warranty qualifies for exemption?

No.  The sale of an extended warranty, which provides for the provision of repair parts and labor, will not qualify for exemption during the Energy Star and WaterSense Sales Tax Holiday, even if the item purchased under warranty is eligible for exemption during the holiday.  The sale of an extended warranty which provides for the provision of labor only can be purchased exempt of the retail sales and use tax, as such sales constitute the sale of a service, which is nontaxable in Virginia.

As a retailer, must I obtain an exemption certificate or other certification from purchasers of qualified Energy Star and WaterSense products during the holiday period?

No.  Retail dealers are not required to obtain an exemption certificate or other certification from purchasers of qualified Energy Star or WaterSense products during the sales tax holiday period.

As a retailer, am I expected to make a determination as to whether purchases are being made for noncommercial or residential use? 

Retailers are required to make a good faith effort to ensure that items purchased exempt of the tax are purchased for noncommercial home or personal use. 

As a retailer, what are some red flags that may indicate that an individual is making purchases during the Energy Star or WaterSense Holiday period for commercial purposes?

  • Large volume of appliances purchased
  • Individual makes purchase using a business or company credit card, debit card, or check.

Is the Energy Star Sales Tax Holiday the same as the Energy Star Income Tax Deduction?

No.  The Energy Star Income Tax Deduction allows for a deduction equal to 20% of the retail sales and use tax paid in purchasing for one’s personal use, certain Energy Star qualified products.  This deduction is completely separate and distinguished from the Energy Star Sales Tax Holiday.  None of the rules that are listed in the Energy Star Sales Tax Holiday Guidelines will apply to the Energy Star Income Tax Deduction, nor will the rules governing the income tax deduction apply during the Energy Star Holiday.

Where can I find additional information on federal and/or state programs that promote energy conservation?

Last Updated 1/30/2014 9:11

 

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