Starting July 1, 2018, a number of new state and local tax laws go into effect, which could impact you or your business. These laws are part of state and local tax legislation enacted by the 2018 session of the Virginia General Assembly. 

Some of the changes include:
  • 1% Sales and Use Tax Increase for Virginia’s Historic Triangle Region: Beginning July 1, 2018, the increase applies to sales made in the city of Williamsburg and the counties of James City and York, with the exception of food purchased for human consumption.
  • Tax Preparer Notification of Data Breach: If you’re a tax professional, you must now report any breach of taxpayer data within a reasonable time period to both Virginia Tax and the affected parties, once the breach is discovered.
  • Electronic Requirement for Certain Individual Income Tax Payments: If you make estimated tax payments for your state individual income tax and meet certain other requirements, you must now submit your payments electronically.
  • Increased Sales Tax Exemption for Produce and Eggs Sold at Farmers’ Markets or Roadside Stands: Previously, the exemption only applied if your annual income from such sales totaled no more than $1,000. The law now allows the exemption if your annual income from the sales doesn’t top $2,500.
  • Agricultural Best Management Practices Credit Now Refundable for Corporations: The credit is now refundable for both corporations and individuals. Previously, the credit was only refundable for individuals. The legislation also prohibits taxpayers from claiming both this credit and another Virginia credit for costs related to the same eligible practices. 
  • Green Job Creation Tax Credit – Sunset Date Extended: The credit was extended for another 3 years, with a new sunset date of Jan. 1, 2021. The credit was previously set to expire for tax year 2018.
  • Land Preservation Tax Credit – $20,000 Annual Limitation and Changes to Transfer Rules:
    • For tax years 2018 and 2019, the annual limitation will remain $20,000. 
    • A taxpayer with unused land preservation credits can now transfer those credits to a designated beneficiary upon their death. Transfers to a designated beneficiary are not subject to the 2% transfer free. 
  • Modification of the Worker Retraining Tax Credit: If your primary business involves manufacturing, you can claim an individual or corporate income tax credit equal to 35% of direct costs incurred during the taxable year while conducting orientation, instruction and training in Virginia relating to your manufacturing activities.

For more information, and a complete list of 2018 state and local tax legislation, view the 2018 Legislative Summary (.pdf).