The 2013 General Assembly passed a comprehensive bill to increase transportation revenue. The bill changes several of the taxes that you as an auto dealer collect from your sales and service customers.
VADA will be conducting its annual Legislative and Legal Update webinar on Tuesday, June 11th from 11:00 am until 1:00 PM. We will cover these issues in detail but wanted to give you a brief overview so you can alert the vendors whose systems will be impacted by the changes – DMS, on-line titling and registration, etc
Tax changes on July 1, 2013:
1. Motor Vehicle Sales and Use Tax
RATE The rate of tax charged on the purchase of a vehicle will increase from 3% to 4%.
REBATES In addition, the sales price on which the tax is figured will exclude any manufacturer rebates – so tax will NOT be charged on those amounts. DMV will be working with the on-line vendors to capture this information separately. You should be prepared to provide rebate information through your on-line system.
2. Additional Registration Fees for alternative Fuel Vehicles
FEE $64.00 annual fee for registering an alternative fuel vehicle including hybrids.
(This fee is due when the vehicle is first registered. It will also be assessed on a pro rata basis when a registration is transferred to one of these vehicles. DMV is working with the on-line vendors for this fee also.)
3. Retail Sales and Use Tax
RATE The rate charged statewide will increase from 5% to 5.3%.
****ADDITIONAL RATE INCREASE IN NORTHERN VIRGINIA AND HAMPTON ROADS****
If your dealership is located in any of the following localities, you will need to collect a total of 6% retail sale tax rate (the 5.3% statewide + a .7% local option).
NOVA: Counties of Arlington, Fairfax, Loudon and Prince William
Cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park
HR: Counties of Gloucester, Isle of Wight, James City, Southampton, Surry and York
Cities of Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, VA Beach and Williamsburg