Virginia Issues Bulletin on New Sales Tax Collection Requirements for Certain Out-of-State Dealers

Wednesday, August 28th, 2013

 
 
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Virginia
General

The Virginia Department of Taxation has issued a tax bulletin discussing the new sales tax collection requirements for out-of-state dealers. These requirements are effective September 1, 2013.

Virginia enacted legislation that creates a presumption that certain out-of-state dealers have nexus with Virginia and are thus required to register and collect Virginia sales and use tax for sales made into Virginia. This presumption arises when a dealer belongs to a commonly controlled group in which a person or entity maintains a distribution center, warehouse, fulfillment center, office, or similar location in Virginia that facilitates the delivery of tangible personal property sold by the dealer. If the dealer cannot rebut this presumption, Virginia requires the dealer to register with the state and collect Virginia sales and use tax.

A dealer can rebut this presumption by showing that the activities conducted by a "commonly controlled person" in Virginia are not significantly associated with the dealer's ability to establish or maintain a market in Virginia for the dealer's sales. A "commonly controlled person" is (1) a person that is a member of the same controlled group of corporations (as defined in the Internal Revenue Code) as the dealer or (2) any other entity that has the same type of ownership relationship with the dealer, even if the entity is not a corporation.

http://www.policylibrary.tax.virginia.gov/OTP/Policy.nsf/ccd0d2ea93db9ba485256968006a39ed/a98f03ea99605edf85257bd00052137b?OpenDocument


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