During the 2016 Session, the Virginia General Assembly enacted House Bill 398 (2016 Acts of Assembly, Chapter 484) and Senate Bill 444 (2016 Acts of Assembly, Chapter 303), which prohibit a purchaser from receiving interest on a refund claim for erroneously paid Retail Sales and Use Tax for any period prior to the date the purchaser submits a complete refund claim to the Department in situations where the purchaser held a valid exemption certificate issued by the Department at the time of purchase but failed to present it to the merchant. The prohibition does not apply to “self-executed” or “self-issued” exemption certificates that purchasers download from the Department’s website and complete and sign. 

The majority of exemption certificates are “self-executed” or “self-issued.”  Currently, the Department only issues exemption certificates to taxpayers that are engaged in specific types of businesses: real property contractors, data centers and their tenants, pollution control equipment and facilities, and non-profit entities. To obtain an exemption certificate issued by the Department, the purchaser must apply in writing to the Department and generally must meet certain statutorily defined requirements.  

The legislation authorizes the Department to issue guidelines for taxpayers to follow when seeking Retail Sales and Use Tax refunds. On June 12, 2017, the Department published final guidelines regarding the Retail Sales and Use Tax Refund Claim Procedures.

Final Guidelines

Comments Regarding Draft Guidelines