                                 CODE OF VIRGINIA

TO WHAT EXTENT AND UNDER WHAT CONDITIONS CITIES AND COUNTIES MAY LEVY LOCAL USE
TAX; COLLECTION THEREOF BY COMMONWEALTH AND RETURN OF REVENUES TO THE CITIES AND
COUNTIES (§ 58.1-606)

A. The council of any city and the governing body of any county which has levied
or may hereafter levy a city or county sales tax under &#xA7; 58.1-605 may levy
a city or county use 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 use tax imposed by this chapter and shall be subject to all the provisions
of this chapter, and all amendments thereof, and the rules and regulations
published with respect thereto, except that no discount under &#xA7; 58.1-622
shall be allowed on a local use tax.

B. The council of any city and the governing body of any county desiring to
impose a local use tax under this section may do so in the manner following:

   1. If the city or county has previously imposed the local sales tax authorized
   by &#xA7; 58.1-605, the local use tax may be imposed by the council or
   governing body by the adoption of a resolution by a majority of all the
   members thereof, by a recorded yea and nay vote, stating its purpose and
   referring to this section, and providing that the local use tax shall become
   effective on the first day of a month at least 60 days after the adoption of
   the resolution. A certified copy of such resolution shall be forwarded to the
   Tax Commissioner so that it will be received within five days after its
   adoption. The resolution authorized by this paragraph may be adopted in the
   manner stated notwithstanding any other provision of law, including any
   charter provision.

   2. If the city or county has not imposed the local sales tax authorized by
   &#xA7; 58.1-605, the local use tax may be imposed by ordinance together with
   the local sales tax in the manner set out in subsections B and C of &#xA7;
   58.1-605.

C. Any local use 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 use tax.

D. The local use tax authorized by this section shall not apply to transactions
to which the sales tax applies, the situs of which for state and local sales tax
purposes is 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. However, the local use tax authorized by this
section shall apply to tangible personal property purchased without this
Commonwealth for use or consumption within the city or county imposing the local
use tax, or stored within the city or county for use or consumption, where the
property would have been subject to the sales tax if it had been purchased
within this Commonwealth. The local use tax shall also apply to leases or
rentals of tangible personal property where the place of business of the lessor
is without this Commonwealth and such leases or rentals are subject to the state
tax. Moreover, the local use tax shall apply in all cases in which the state use
tax applies.

E. Out-of-state dealers who hold certificates of registration to collect the use
tax from their customers for remittance to this Commonwealth shall, to the
extent reasonably practicable, in filing their monthly use tax returns with the
Tax Commissioner, break down their shipments into this Commonwealth by cities
and counties so as to show the city or county of destination. If, however, the
out-of-state dealer is unable accurately to assign any shipment to a particular
city or county, the local use tax on the tangible personal property involved
shall be remitted to the Commonwealth by such dealer without attempting to
assign the shipment to any city or county.

F. Local use tax revenue shall be distributed among the cities and counties for
which it is collected, respectively, as shown by the records of the Department,
and the procedure shall be the same as that prescribed for distribution of local
sales tax revenue under &#xA7; 58.1-605. The local use tax revenue that is not
accurately assignable to a particular city or county shall be distributed
monthly by the appropriate state authorities among the cities and counties in
this Commonwealth imposing the local use tax upon the basis of taxable retail
sales in the respective cities and counties in which the local sales and use tax
was in effect in the taxable month involved, as shown by the records of the
Department, and computed with respect to taxable retail sales as reflected by
the amounts of the local sales tax revenue distributed among such cities and
counties, respectively, in the month of distribution. Notwithstanding any other
provision of this section, the Tax Commissioner shall develop a uniform method
to distribute local use tax. Any significant changes to the method of local use
tax distribution shall be phased in over a five-year period. Distribution
information shall be shared with the affected localities prior to implementation
of the changes.

G. All local use tax revenue shall be used, applied or disbursed by the cities
and counties as provided in &#xA7; 58.1-605 with respect to local sales tax
revenue.

HISTORY: Code 1950, § 58-441.49:1; 1968, c. 191; 1984, c. 675; 1999, c. 156;
2004, Sp. Sess. I, c. 3; 2007, c. 896; 2008, cc. 484, 488; 2013, c. 766.