Gov. Bob McDonnell plans to propose a budget bill that will end an accelerated tax payment for most state retailers a year earlier than planned.
McDonnell wants to use $50 million in the current fiscal year, which ends June 30, to end the required early payments for 95.6 percent of retailers in the state. The governor had previously sought to end the early payments in fiscal year 2013.
“The accelerated sales tax can feel to retailers like a ‘double tax,’” McDonnell said in a statement. “It penalizes Virginia retailers and merchants and skews state’s revenues. It is bad policy and it needs to be eliminated as quickly as we can.”
In fiscal year 2010, the General Assembly required retailers with more than $1 million in annual sales to prepay part of their July sales tax in June, so money could be counted in the prior fiscal year.
During the 2011 session, the General Assembly ended the requirement for all retailers who had less than $5.4 million in sales each year. If the Assembly passes McDonnell’s current legislation, it would mean that the accelerated tax payment would end for retailers with sales of $26 million or less a year, exempting another 1,407 companies.
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