                                 CODE OF VIRGINIA

ADDITIONAL LOCAL SALES TAX IN CERTAIN LOCALITIES; USE OF REVENUES FOR
CONSTRUCTION OR RENOVATION OF SCHOOLS (§ 58.1-605.1)

A. 1. In addition to the sales tax authorized under § 58.1-605, a qualifying
locality may levy a general retail sales tax at a rate not to exceed one percent
as determined by its governing body to provide revenue solely for capital
projects for the construction or renovation of schools in each such locality.
Such tax shall be added to the rates of the state and local sales tax imposed by
this chapter and shall be subject to all the provisions of this chapter and the
rules and regulations published with respect thereto. No discount under §
58.1-622 shall be allowed on this local sales tax.

   2. Any tax imposed pursuant to this section shall expire (i) if the capital
   projects for the construction or renovation of schools are to be financed by
   bonds or loans, on the date by which such bonds or loans shall be repaid or
   (ii) if the capital projects for the construction or renovation of schools are
   not to be financed by bonds or loans, on a date chosen by the governing body
   and specified in any resolution passed pursuant to the provisions of
   subdivision B 1. Such expiration date shall not be more than 20 years after
   the date of the resolution passed pursuant to the provisions of subdivision B
   1.

B. 1. This tax may be levied only if the tax is approved in a referendum within
the qualifying locality held in accordance with § 24.2-684 and initiated by a
resolution of the local governing body. Such resolution shall state (i) if the
capital projects for the construction or renovation of schools are to be
financed by bonds or loans, the date by which such bonds or loans shall be
repaid or (ii) if the capital projects for the construction or renovation of
schools are not to be financed by bonds or loans, a specified date on which the
sales tax shall expire.

   2. The clerk of the circuit court shall publish notice of the referendum in a
   newspaper of general circulation in the qualifying locality once a week for
   three consecutive weeks prior to the election. The question on the ballot for
   the referendum shall include language stating (i) that the revenues from the
   sales tax shall be used solely for capital projects for the construction or
   renovation of schools and (ii) the date on which the sales tax shall expire.

C. The governing body of the qualifying locality, if it elects to impose a local
sales tax under this section after approval at a referendum as provided in
subsection B shall 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 120 days after its adoption. Such ordinance
shall state the date on which the sales tax shall expire. 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.

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
exemptions and penalties as provided for the state sales tax; however, the local
sales tax levied under this section shall not be levied on food purchased for
human consumption or essential personal hygiene products, as such terms are
defined in &#xA7; 58.1-611.1.

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
that is hereby created on the Comptroller&#8217;s books for each qualifying
locality under the name &#8220;Collections of Additional Local Sales Taxes in
____ (INSERT NAME OF THE QUALIFYING LOCALITY).&#8221; Each fund shall be
administered as provided in &#xA7; 58.1-605. A separate fund shall be created
for each qualifying locality. Only local sales tax moneys collected in that
qualifying locality shall be deposited in that locality&#8217;s fund.

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 State Treasurer in the proper amount in favor of each
qualifying locality, and such payments shall be charged to the account of the
qualifying locality under its 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 payment for
each of the next two months. In addition, the payment shall include a refund of
amounts erroneously not paid to each qualifying locality 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. The revenues from this tax shall be used solely for capital projects for new
construction or major renovation of schools in the qualifying locality,
including bond and loan financing costs related to such construction or
renovation.

HISTORY: 2019, c. 648; 2020, cc. 327, 427, 428, 705, 708, 865.