Virginia – Reminder Regarding Tax Collection Requirements for Out-of-State Dealers

SALT Report 2963 – The Virginia Department of Taxation issued a reminder regarding the retail sales tax collection requirements for out-of-state dealers that took effect September 1, 2013.  Specifically, Senate Bill 597, Laws 2012 requires that certain out-of-state dealers register and collect retail sales and use tax on all taxable sales made into Virginia.

Out-of-state dealers who are subject to this requirement are those that belong to a commonly controlled group in which a person or entity maintains a distribution center, warehouse, fulfillment center, office, or other location in the State that facilitates the delivery of tangible personal property sold by the out-of-state dealer.  However, the dealer may rebut this presumption by demonstrating that the activities conducted by the commonly controlled person in Virginia are not significantly associated with the dealer’s ability to establish or maintain a sales market in the State.

The legislation provided that these provisions would go into effect on September 1, 2013, unless federal legislation that would require remote sellers to collect taxes on items shipped into the State was passed.  Because federal legislation has not been enacted, all out-of-state dealers who meet the requirements above are required to collect sales and use taxes on all sales made into Virginia.

For Further Information

Virginia Department of Taxation – Tax Bulletin 13-11

Out-of-State Dealers Sales and Use Tax Guide

SALT Report 2903 – Virginia Tax Collection Requirements for Out-of-State Dealers to Begin