                                 CODE OF VIRGINIA

TO WHAT EXTENT AND UNDER WHAT CONDITIONS CITIES AND COUNTIES MAY LEVY LOCAL
SALES TAXES; COLLECTION THEREOF BY COMMONWEALTH AND RETURN OF REVENUE TO EACH
CITY OR COUNTY ENTITLED THERETO (§ 58.1-605)

A. No county, city or town shall impose any local general sales or use tax or
any local general retail sales or use tax except as authorized by this section
or &#xA7; 58.1-605.1.

B. The council of any city and the governing body of any county may levy a
general retail sales tax at the rate of one percent to provide revenue for the
general fund of such city or county. Such tax shall be added to the rate of the
state sales tax imposed by &#xA7;&#xA7; 58.1-603 and 58.1-604 and shall be
subject to all the provisions of this chapter and the rules and regulations
published with respect thereto. No discount under &#xA7; 58.1-622 shall be
allowed on a local sales tax.

C. 1. The council of any city and the governing body of any county desiring to
impose a local sales tax under this section may do so by the adoption of an
ordinance stating its purpose and referring to this section, and providing that
such ordinance shall be effective on the first day of a month at least 60 days
after its adoption. A certified copy of such ordinance shall be forwarded to the
Tax Commissioner so that it will be received within five days after its
adoption.

   2. Prior to any change in the rate of any local sales and use tax, the Tax
   Commissioner shall provide remote sellers with at least 30 days&#8217; notice.
   Any change in the rate of any local sales and use tax shall only become
   effective on the first day of a calendar quarter. Failure to provide notice
   pursuant to this section shall require the Commonwealth and the locality to
   apply the preceding effective rate until 30 days after notification is
   provided.

D. Any local sales tax levied under this section shall be administered and
collected by the Tax Commissioner in the same manner and subject to the same
penalties as provided for the state sales tax.

E. All local sales tax moneys collected by the Tax Commissioner under this
section shall be paid into the state treasury to the credit of a special fund
which is hereby created on the Comptroller&#8217;s books under the name
&#8220;Collections of Local Sales Taxes.&#8221; Such local sales tax moneys
shall be credited to the account of each particular city or county levying a
local sales tax under this section. The basis of such credit shall be the city
or county in which the sales were made as shown by the records of the Department
and certified by it monthly to the Comptroller, namely, the city or county of
location of each place of business of every dealer paying the tax to the
Commonwealth without regard to the city or county of possible use by the
purchasers. If a dealer has any place of business located in more than one
political subdivision by reason of the boundary line or lines passing through
such place of business, the amount of sales tax paid by such a dealer with
respect to such place of business shall be treated for the purposes of this
section as follows: one-half shall be assignable to each political subdivision
where two are involved, one-third where three are involved, and one-fourth where
four are involved.

F. As soon as practicable after the local sales tax moneys have been paid into
the state treasury in any month for the preceding month, the Comptroller shall
draw his warrant on the Treasurer of Virginia in the proper amount in favor of
each city or county entitled to the monthly return of its local sales tax
moneys, and such payments shall be charged to the account of each such city or
county under the special fund created by this section. If errors are made in any
such payment, or adjustments are otherwise necessary, whether attributable to
refunds to taxpayers, or to some other fact, the errors shall be corrected and
adjustments made in the payments for the next two months as follows: one-half of
the total adjustment shall be included in the payments for the next two months.
In addition, the payment shall include a refund of amounts erroneously not paid
to the city or county and not previously refunded during the three years
preceding the discovery of the error. A correction and adjustment in payments
described in this subsection due to the misallocation of funds by the dealer
shall be made within three years of the date of the payment error.

G. Such payments to counties are subject to the qualification that in any county
wherein is situated any incorporated town constituting a special school district
and operated as a separate school district under a town school board of three
members appointed by the town council, the county treasurer shall pay into the
town treasury for general governmental purposes the proper proportionate amount
received by him in the ratio that the school age population of such town bears
to the school age population of the entire county. If the school age population
of any town constituting a separate school district is increased by the
annexation of territory since the last estimate of school age population
provided by the Weldon Cooper Center for Public Service, such increase shall,
for the purposes of this section, be added to the school age population of such
town as shown by the last such estimate and a proper reduction made in the
school age population of the county or counties from which the annexed territory
was acquired.

H. One-half of such payments to counties are subject to the further
qualification, other than as set out in subsection G, that in any county wherein
is situated any incorporated town not constituting a separate special school
district that has complied with its charter provisions providing for the
election of its council and mayor for a period of at least four years
immediately prior to the adoption of the sales tax ordinance, the county
treasurer shall pay into the town treasury of each such town for general
governmental purposes the proper proportionate amount received by him in the
ratio that the school age population of each such town bears to the school age
population of the entire county, based on the latest estimate provided by the
Weldon Cooper Center for Public Service. The preceding requirement pertaining to
the time interval between compliance with election provisions and adoption of
the sales tax ordinance shall not apply to a tier-city. If the school age
population of any such town not constituting a separate special school district
is increased by the annexation of territory or otherwise since the last estimate
of school age population provided by the Weldon Cooper Center for Public
Service, such increase shall, for the purposes of this section, be added to the
school age population of such town as shown by the last such estimate and a
proper reduction made in the school age population of the county or counties
from which the annexed territory was acquired.

I. Notwithstanding the provisions of subsection H, the board of supervisors of a
county may, in its discretion, appropriate funds to any incorporated town not
constituting a separate school district within such county that has not complied
with the provisions of its charter relating to the elections of its council and
mayor, an amount not to exceed the amount it would have received from the tax
imposed by this chapter if such election had been held; however, Charlotte
County, Gloucester County, Halifax County, Henry County,  Mecklenburg County,
Northampton County, Patrick County, and Pittsylvania County  may appropriate any
amount to any such incorporated town.

J. It is further provided that if any incorporated town which would otherwise be
eligible to receive funds from the county treasurer under subsection G or H be
located in a county that does not levy a general retail sales tax under the
provisions of this law, such town may levy a general retail sales tax at the
rate of one percent to provide revenue for the general fund of the town, subject
to all the provisions of this section generally applicable to cities and
counties. Any tax levied under the authority of this subsection shall in no case
continue to be levied on or after the effective date of a county ordinance
imposing a general retail sales tax in the county within which such town is
located.

HISTORY: Code 1950, §§ 58-441.49, 58-441.49:2; 1966, c. 151; 1968, c. 638;
1982, c. 555; 1984, cc. 675, 695; 1997, cc. 245, 725; 2004, Sp. Sess. I, c. 3;
2007, c. 896; 2008, cc. 484, 488; 2010, cc. 386, 629; 2012, c. 831; 2013, c.
766; 2019, cc. 648, 815, 816, 854; 2020, cc. 327, 427, 428, 705, 708, 865.