CHAPTER 151

An Act to amend the Code of Virginia by adding thereto in Title 58 a new
chapter numbered 8.1 and new sections numbered 58-441.1 through
§8-441.51, so as to levy a general retail sales and use tax, applicable
to sales, distributions, leases or rentals, and storage of tangible per-
sonal property, and charges for rooms, lodgings or accommodations
furnished transients, and specific services; to provide for tts collection
and enforcement and to prescribe penalties; to provide for the dis-
position of the revenues 80 collected; to appropriate moneys; to pro-
hibit the imposition or continuance of local general sales and use
taxes or local general retail sales and use taxes after the effective date
of the tax imposed by this Act, except as authorized by this Act; to
provide for the collection of local sales taxes and for the return of the
revenue derived therefrom to each city or county entitled thereto;
to repeal §§ 58-804, 58-804.1, 58-805, 58-806, 58-807, 58-808, 58-809,
58-310, 58-811, 58-812, 58-318, 58-314, 58-315, 58-816, 58-81 7, 58-817.1,
§8-818, 58-819, 58-820, 58-820.1, 58-821, 58-821.1, 58-822, 58-828,
58-824, 58-325, "58-326, 58-327, 58-828, 58-329, 58-8380, 58-881, 58-832,

§8-388, 58-884, 58-885, 58-886, 58-887, 58-888 and 58-839 of the Code
of Virginia, relating to State ‘wholesale and retail merchants’ license
taxes; and to amend and reenact § 58-418, as amended, of the Code

of Virginia, relating to the rate of the State tax on capital.
[H 222]

Approved March 12, 1966

Be it enacted by the General Assembly of Virginia:

1.. That the Code of. Virginia be amended by adding thereto in Title 58
a new chapter numbered 8.1 and new sections numbered 58-441.1 through
58-441.51, the new chapter and sections being as follows:

| Chapter 8.1
Virginia Retail Sales and Use Tax

§ 58-441.1. Citation.—This chapter shall be known and may be cited
as the “Virginia Retail Sales and Use Tax Act.”

§ 58-441.2. Meaning of “person,” “sale,” “retail sale,” and “sale at
retail.”—The following words, terms, and phrases, when used in this
chapter shall have the meanings ascribed to them in this section, except
when the context clearly indicates a different meaning:

(a) “Person” includes any individual, firm, co-partnership, coopera-
tive, non-profit membership corporation, joint venture, association, cor-
poration, estate, trust, business trust, trustee in bankruptcy, receiver, auc-
tioneer, syndicate, assignee, club, society, or other group or combination
acting as a unit, body politic or political sub-division, whether public or
private, or quasi-public, and the plural as well as the singular number.

(b) “Sale” means any transfer of title or possession, or both, ex-
change, barter, lease or rental, conditional or otherwise, in any manner or
by any means whatsoever, of tangible personal property and any rendition
of a taxable service for a consideration, and includes the fabrication of
tangible personal property for consumers who furnish, either directly or
indirectly, the materials used in fabrication ; and the furnishing, preparing,
or serving for a consideration of any tangible personal property consumed
on the premises of the person furnishing, preparing, or serving such
tangible personal property. A transaction whereby the possession of
property is transferred but the seller retains title as security for the pay-
ment of the price shall be deemed a sale.

(c) “Retail sale” or a “sale at retail” means a sale to a consumer
or to any person for any purpose other than for resale in the form of
tangible personal property or services taxable under this chapter, and shall
mean and include any such transaction as the Commissioner upon in-
vestigation finds to be in lieu of a sale; provided, that sales for resale
must be made in strict compliance with rules and regulations made under
this chapter. Any dealer making a sale for resale which is not in strict
compliance with such rules and regulations shall himself be liable for and
pay the tax.

(d) For the purpose of the tax imposed by this chapter, the terms
“retail sale” and a “sale at retail’’ shall also include the sale or charges
for any room or rooms, lodgings, or accommodations furnished to transients
by any hotel, motel, inn, tourist camp, tourist cabin, camping grounds,
club, or any other place in which rooms, lodging, space, or accommodations
are regularly furnished to transients for a consideration, The tax shall
not apply, however, to rooms, lodgings, or accommodations supplied for
a period of ninety continuous days or more.

(e) For the purpose of the tax imposed by this chapter, the terms
“retail sale” and a “sale at retail” shall also include sales of tangible
personal property to persons for resale when because of the operation of
the business, or its very nature, or the lack of a place of business in which
to display a certificate of registration, or the lack of a place of business in
which to keep records, or the lack of adequate records, or because such
persons are minors or transients, or because such persons are engaged
in essentially service businesses, or for any other reason there is likelihood
that the State will lose tax funds due to the difficulty of policing such busi-
ness operations. The Commissioner is authorized to promulgate rules and
regulations requiring vendors of or sellers to such persons to collect the
tax imposed by this chapter on the cost price of such tangible personal
property to such persons and may refuse to issue certificates of registration
to such persons.

§ 58-441.8. Sundry terms, words and phrases, meaning—(a) The

“‘gross sales” means the sum total of all retail sales of tangible per-
sonal property or services as defined in this chapter, without any deduction
whatsoever of any kind or character, except as provided in this chapter.
“Gross sales” shall not include the Federal retailers’ excise tax if this excise
tax is billed to the purchaser separately from the selling price of the article,
or the Virginia retail sales or use tax, or any sales tax imposed by any county
or city under § 58-441.49.

(b) “Sales price” means the total amount for which tangible personal
property or services are sold, including any services that are a part of the
sale, valued in money, whether paid in money or otherwise, and includes
any amount for which credit is given to the purchaser, consumer, or lessee
by the dealer, without any deduction therefrom on account of the cost of
the property sold, the cost of materials used, labor or service costs, losses or
any other expenses whatsoever; but cash discounts allowed and taken on
sales shall not be included in the sales price; nor shall the sales price include
the amount separately charged for labor or services rendered in installing,
applying, or remodeling or repairing property sold, finance charges, carrying
charges, service charges or interest from credit extended on sales of tangible
personal property under conditional sale contracts or other conditional con-
tracts providing for deferred payments of the purchase price, or transporta-
tion charges separately stated. Where used articles are taken in trade, or
in a series of trades as a credit or part payment on the sale of new or used
articles, the tax levied by this chapter shall be paid on the net difference
between the sales price of the new or used articles and the credit for the
used articles.

(c) “Cost price” means the actual cost of an item or article of tangible
personal property computed in the same manner as the sales price in sub-
paragraph (b) of this section without any deductions therefrom on account
of the cost of materials used, labor, or service costs, transportation charges,
or any expenses whatsoever.

(d) “Lease or rental’ means the leasing or renting of tangible per-
sonal property and the possession or use thereof by the lessee or rentee
for a consideration, without transfer of the title to such property.

(e) “Distribution” includes the transfer or delivery of tangible per-
sonal property for use, consumption, or storage by the distributee, and the
use, consumption, or storage of tangible personal property by a person who
has processed, manufactured, refined, or converted such property, but does
not include the transfer or delivery of tangible personal property for
resale or any use, consumption, or storage otherwise exempt under this

pter.

(f) “Gross proceeds” means the charges made or voluntary con-
tributions received for the lease or rental of tangible personal prop-
erty or for furnishing services, computed with the same deductions,
where applicable, as for sales price in sub-paragraph (b) of this section
over the term of the lease, rental, service, or use, but not less frequently
than monthly.

(z) “Storage” means and includes any keeping or retention of
tangible personal property for use, consumption or distribution in this
State, or for any purpose other than sale at retail in the regular course
of business.

(h) “Use” means and includes the exercise of any right or power
over tangible personal property incident to the ownership thereof, except
that it does not include the sale at retail of that property in the regular
course of business.

(i) “Business” includes any activity engaged in by any person, or
caused to be engaged in by him, with the object of gain, benefit or advan-
tage, either direct or indirect. | |

(j) “Retailer” means and includes every person engaged in the busi-
ness of making sales at retail, or for distribution, use, consumption, or
storage to be used or consumed in this State.

(k) “Commissioner” means the State Tax Commissioner.

(1) “Tangible personal property’ means and includes personal prop-
erty, which may be seen, weighed, measured, felt, or touched, or is in any
other manner perceptible to the senses. The term “tangible personal prop-
erty” shall not include stocks, bonds, notes, insurance or other obligations
or securities.

(m) “Use tax” refers to the tax imposed upon the use, consumption,
distribution, and storage as herein defined.

(n) “In this State” or “in the State’ means within the exterior
limits of the Commonwealth of Virginia and includes all territory within
these limits owned by or ceded to the United States of America.

(o) The words “import” and “imported” apply to tangible personal
property imported into this State from other States as well as from foreign
countries, and the words “export” and “exported” apply to tangible per-
sonal property exported from this State to other States as well as to
foreign countries.

8 58-441.4. Imposition of sales tax.—There is hereby levied and im-
osed, in addition to all other taxes and fees of every kind now imposed
y law, a license or privilege tax upon every person who engages in the

business of selling at retail or distributing tangible personal property in
this State, or who rents or furnishes any of the things or services taxable
under this chapter, or who stores for use or consumption in this State any
item or article of tangible personal property as defined in this chapter,
or who leases or rents such property within this State, the same to be
collected in the amount to be determined by the application of the following

tes:

(a) At the rate of two per cent of the sales price of each item or
article of tangible personal property when sold at retail or distributed
in this State, the tax to be computed on gross sales; provided, however, that
on and after July 1, 1968, the rate of the tax shall be three per cent.

(b) At the rate of two per cent of the gross proceeds derived from
the lease or rental of tangible personal property, as defined in this chapter,
where the lease or rental of such property is an established business, or
part of an established business, or the same is incidental or germane to
the such business; provided, however, that on and after July 1, 1968, the
rate of the tax shall be three per cent.

(c) At the rate of two per cent of the cost price of each item or
article of tangible personal property stored in this State for use or con-
sumption in this State; provided, however, that on and after July 1, 1968,
the rate of the tax shall be three per cent.

(d) At the rate of two per cent of the gross proceeds derived from
the sale or charges for rooms, lodgings or accommodations furnished to
transients as set out in sub-paragraph (d) of § 58-441.2; provided, how-
ever, that on and after July 1, 1968, the rate of the tax shall be three
per cent.

(e) At the rate of two per cent of the gross sales of all services tax-
able under this chapter; provided, however, that on and after July 1, 1968,
the rate of the tax shall be three per cent. No services are taxable under
this chapter except those expressly enumerated and made so taxable.

_ The tax so levied is and shall be in addition to all other taxes, whether
levied in the form of property, excise, license, franchise, or privilege taxes,
and shall be in addition to all other taxes and fees levied, notwithstanding
any other provision of law.

08-441.5, Imposition of use tax.—There is hereby Jevied and im-
post in addition to all other taxes and fees of every kind now imposed
law, whether levied in the form of property, excise, license, franchise,
or privilege taxes, and notwithstanding any other provision of law, a tax
upon the use or consumption of tangible personal property in this State,
or the storage of such property outside the State for use or consumption
in this State, the same to be collected in the amount determined by applica-
tion of the following rates:

(a) Two per cent of the cost price of each item or article of tangible
personal property used or consumed in this State; provided, that tangible
personal property which has been acquired after the effective date of this
chapter for use outside this State and subsequently becomes subject to the
tax imposed hereunder shall be taxed on the basis of its cost price if such
property is brought within this State for use within six months of its acqui-
ation; but if so brought within this State six months or more after its
acquisition, such property shall be taxed on the basis of the current market

e (but not in excess of its cost price) of such property at the time of its

use within this State; provided, further, that such tax shall be based
on such proportion of the cost price or current market value as the duration
of time of use within this State bears to the total useful life of such property
(but it shall be presumed in all cases that such property will remain within

State for the remainder of its useful life unless convincing evidence is
provided to the contrary).

Two per cent of the cost price of each item or article of tangible
etn property stored outside this State for use or consumption in this

(c)_ The rate of two per cent levied by the foregoing provisions of this
Seal apply until and through June 30, 1968, and on and after July 1,
, the rate of the tax levied by this section shall be three per cent’
(d) A transaction taxed under § 58-441.4 shall not also be taxed
under § 58-441.5, nor shall the same transaction be taxed more than once
under either section.

§ 58-441.6. Exclusions and exemptions.—The terms “sale at retail,”
“lease or rental,” “distribution,” “use,” “storage’’ and “consumption” shall
not include industrial materials for future processing, manufacturing, re-
fining, or conversion into articles of tangible personal property for resale
where such industrial materials either enter into the production of or
become a component part of the finished product; nor shall such terms
include industrial materials that are coated upon or impregnated into
the product at any stage of its processing, manufacture, refining, or con-
version for resale; nor shall such terms include machinery or tools or
repair parts therefor or replacements thereof, fuel, power, energy, or
supplies, used directly in processing, manufacturing, refining, mining or
conversion of products for sale or resale; nor shall such terms include
materials, containers, labels, sacks, cans, boxes, drums or bags for future
use for packaging tangible personal property for shipment or sale.

In addition to the exclusions or exemptions set out in the next preceding
paragraph such terms shall not include the following:

(a) Professional, insurance, or personal service transactions which
involve sales as inconsequential elements for which no separate charges are
mace nor services rendered by repairmen for which a separate charge is
made.

(b) Tangible personal property delivered pursuant to bona fide writ-
ten contracts entered into before the date of the enactment of this chapter,
provided delivery is made within ninety days after the effective date of this
chapter; and building supplies, fixtures or equipment that enter into or
become a part of a building or other kind of structure in this State, where
plans, specifications, and the construction contract for a specific project has
been entered into prior to the date of the enactment of this chapter, pro-
vided delivery is made within the time specified in such contract for the
completion of such specific project.

(c) Commercial feeds, seed, plants, fertilizers, liming materials, breed-
ing and other livestock, semen, breeding fees, baby chicks, turkey poults,
agricultural] chemicals, fuel for drying or curing crops, baler twine, con-
tainers for fruits and vegetables, or farm machinery, and all other agri-
cultural supplies provided the same are sold to and purchased by farmers
for use in agricultural production for market.

(d) Each and every agricultural commodity or kind of seafood sold
or distributed by any person to any other person, who purchases not for
direct consumption but for the purpose of acquiring raw products for use
or consumption in the process of preparing, finishing, or manufacturing such
agricultural or seafood commodity for the ultimate retail consumer trade,
except when such agricultural or seafood commodity is actually sold or dis-
tributed as a marketable or finished product to the ultimate consumer. The
term “agricultural commodity,” for the purposes of this sub-paragraph,
shall mean horticultural, poultry, and farm products, and livestock and live-
stock products.

(e) Motor vehicle fuels which are subject to the tax imposed by
Chapters 13 and 14 of Title 58 of the Code of Virginia, as amended.

(f) Motor vehicles, trailers and semi-trailers, mobile homes and
travel trailers.

(zg) Gas, electricity, or water when delivered to consumers through
mains, lines, or pipes.

Tangible personal property sold or leased to a public service
corporation subject to a State franchise or license tax upon gross receipts
for use or consumption by such corporation directly in the rendition of its
public service; and tangible personal property sold or leased to a public
service corporation engaged in business as a common carrier of property
or passengers by motor vehicle, for use or consumption by such common
carrier directly in the rendition of its public service.

(i) Ships or vessels used or to be used exclusively or principally in
interstate or foreign commerce, or repairs and alterations thereof; or fuel
and supplies for use or consumption aboard ships or vessels plying the high
seas, either in intercoastal trade between ports in this State and ports in
other States of the United States or its territories or possessions, or in
foreign commerce between ports in this State and ports in foreign countries,
when delivered directly to such ships or vessels; nor shall the tax imposed
by this chapter apply to tangible personal property used directly in the
building, conversion or repair of the ships or vessels covered by this sub-
paragraph (i).

(j) Broadcasting equipment and parts and accessories thereto and
towers used or to be used by commercial radio and television companies or
concerns which are under the regulation and supervision of the Federal
Communications Commission.

(k) Any publication issued daily, or regularly at average intervals
not exceeding three months, except that newsstand sales of the same are
taxable.

(1) School lunches sold and served to pupils and employees of schools
and subsidized by government, and school text books sold by a local school
board or authorized agency thereof, and school textbooks sold by a college
or other institution of learning, not conducted for profit, for use of students
attending such institution of learning.

(m) An “occasional sale,” which means a sale of tangible pers: nal
property not held or used by a seller in the course of an activity for which
he is required to hold a certificate of registration, including the sale or ex-
change of all or substantially all the assets of any business and the reorgani-
zation or liquidation of any business, provided such sale or exchange is
not one of a series of sales and exchanges sufficient in number, scope, and
character to constitute an activity requiring the holding of a certificate of
registration.

(n) Tangible personal property for future use by a person for taxable
lease or rental as an established business or part of an established business,
or incidental or germane to such business, including a simultaneous purchase
and taxable leaseback.

(o) Alcoholic beverages sold by the Virginia Alcoholic Beverage Con-
trol Board through its government stores.

(p) Tangible personal property for use or consumption by this State,
any political subdivision of this State, or the United States; but this exclu-
sion shall not apply to sales and leases to privately owned financial and other
privately owned corporations chartered by the United States.

(q) Tangible personal property purchased for use or consumption
directly and exclusively in research and development in the experimental
or laboratory sense.

(r) Delivery of tangible personal property outside this State for use
or consumption outside this State.

(s) Medicines, drugs, crutches, braces, artificial eyes, contact lenses,
eye glasses, hearing aids, prosthetic devices and orthopedic appliances
dispensed by or sold on prescriptions or work orders of licensed physicians,
dentists, optometrists, ophthalmologists or opticians.

(t) Tangible personal property for use or consumption by a college
or other institution of learning or a hospital, provided such college, insti-
tution of learning or hospital is not conducted for profit.

(a) Tangible personal property sold or leased to an airline operating
in interstate or foreign commerce under a certificate of convenience and
necessity issued by the Federal Civil Aeronautics Board or successor
agency for use or consumption by such airline directly in the rendition of
its common carrier service.

§ 58-441.7. Reserved.

§ 58-441.8. Credit for taxes paid in another State.—A credit shall be
granted against the taxes imposed by this chapter with respect to a person’s
use in this State of tangible personal property purchased by him in another
State. The amount of the credit shall be equal to the tax paid by him to
another State or political subdivision thereof by reason of the imposition
of a similar tax on his purchase or use of the property. The amount of the
credit shall not exceed the tax imposed by this chapter.

§ 58-441.9. Applicability or inapplicability of use tax in certain
cases.—The use tax shall not apply to tangible personal property owned or
acquired in this State, or imported into this State, or held or stored in this
State, prior to the effective date of this chapter. But the use tax shall
apply to all tangible personal property imported or caused to be imported
into this State on or after the effective date of this chapter except as in this
chapter provided, unless such property has previously borne a sales or use
tax in another State or political subdivision equal to or greater than the
tax imposed by this chapter for which credit is given under § 58-441.8, or
unless proof is furnished that the tangible personal property imported or
caused to be imported into this State was owned or acquired prior to the
effective date of this chapter, or otherwise is exempt under this chapter;
provided, however, that the use tax shall not apply in any way with respect
to the use of any article of tangible personal property brought into this
State by a non-resident individual, visiting in this State, for his personal
use, while within this State.

§ 58-441.10. Moving residence or business into State; use tax.—The
use tax shall not apply to tangible personal property purchased outside this
State for use outside this State by a then non-resident natural person or a
business entity not actually doing business within this State, who later
brings such tangible personal property into this State in connection with his
establishment of a permanent residence or business in this State, provided
that such property was purchased more than six months prior to the date
it was first brought into this State or prior to the establishment of such
residence or business, whichever first occurs. This section shall not apply
to tangible personal property temporarily brought into this State for the
performance of contracts for the construction, reconstruction, installation,
repair, or for any other service with respect to real estate or fixtures

ereon.

§ 58-441.11. Farm consumption.—The use tax shall not apply to
livestock and livestock products, poultry and poultry products, farm and
agricultural products, when produced by the farmer and used or consumed
by him and the members of his family.

§ 58-441.12. Dealers.—The tax levied by §§ 58-441.4 and 68-441.5
shall be collectible from all persons who are dealers, as hereinafter defined.

7 The term “dealer,” as used in this chapter, shall include every person
who:
(a) Manufactures or produces tangible personal property for sale
at retail. for use, consumption, or distribution, or for storage to be used or
consumed in this State.

(b) Imports or causes to be imported into this State tangible per-
sonal property from any State or foreign country, for sale at retail, for use,
SpeuTaprian, or distribution, or for storage to be used or consumed in this

ate.

(c) Sells at retail, or who offers for sale at retail, or who has in his
possession for sale at retail, or for use, consumption, or distribution, or for
storage to be used or consumed in this State, tangible personal property as
defined in this chapter.
(d) Has sold at retail, or used, consumed, or distributed, or stored
for use or consumption in this State, tangible personal property and who
cannot prove that the tax levied by this chapter has been paid on the sale
at retail, the use, consumption, distribution, or storage of such tangible
personal property.

(e) Leases or rents tangible personal property, as defined in this
chapter, for a consideration, permitting the use or possession of such prop-
erty without transferring title thereto.

(f) Is the lessee or rentee of tangible personal property, as defined
in this chapter, and who pays to the owner of such property a consideration
for the use or possession of such property without acquiring title thereto.

(g) Maintains or has within this State, directly, or by an agent or
a subsidiary, an office, distributing house, sales room, or house, warehouse,
or other place of business.

(h) Solicits business in this State either by employees, independent
contractors, agents or other representatives or by distribution of catalogs
or other advertising matter and by reason thereof makes sales to persons
within this State of tangible personal property, the use of which is taxed by
this chapter; and any other person making sales to persons within this
State of tangible personal property, the use of which is taxed by this chap-
ter, who may be authorized by the Commissioner to collect such tax.

(i) Asa representative, agent, or solicitor, of an out-of-State prin-
cipal, solicits, receives and accepts orders from persons in this State for
Stas delivery and whose principal refuses to register as a dealer under

§8-441.16.
(j) Shall become liable to and shall owe this State any amount of tax
Imposed by this chapter, whether he holds, or is required to hold, a certifi-
cate of registration under § 58-441.16 or not.

§ 68-441.18. Bracket system for tax at rate of two per cent.—Be-
ginning with the effective date of the tax imposed by this chapter at the
rate of two per cent, the following brackets of prices shall be used for the
collection the tax:

$0.01 to $0.14 no tax
15 to .64 1¢ tax
65 to 1.14 2¢ tax
1.15 to 1.64 3¢ tax
1.65 to 2.14 4¢ tax
2.15 to 2.64 5¢ tax
2.65 to 8.14 6¢ tax
8.15 to 38.64 7¢ tax
$.65 to 4.14 8¢ tax
4.15 to 4.64 9¢ tax
4.65 to 5.00 10¢ tax

On transactions over five dollars, the tax shall be computed at a straight
two per cent, one-half cent or more being treated as one cent. The fore-
going bracket system shall not relieve the dealer from the duty and liability
to remit an amount equal to two per cent of his gross taxable sales as
provided in this chapter.

§ 58-441.14. Bracket system for tax at rate of three per cent.—On
and after July 1, 1968, the following brackets of prices shall be used for
the collection of the tax imposed by this chapter:
On transactions over five dollars, the tax shall be computed at a straight
three per cent, one-half cent or more being treated as one cent. The fore-
going bracket system shall not relieve the dealer from the duty and liability
to remit an amount equal to three per cent of his gross taxable sales as
provided in this chapter.

§ 58-441.15. Contractors.—(a) Any person who contracts orally, in
writing, or by purchase order, to perform construction, reconstruction,
installation, repair, or any other service with respect to real estate or fix-
tures thereon, and in connection therewith to furnish tangible personal
property, shall be deemed to have purchased such tangible personal property
for use or consumption. Any sale, distribution, or lease to or storage for
such person shall be deemed a sale, distribution, or lease to or storage
for the ultimate consumer and not for resale, and the dealer making the
sale, distribution, or lease to or storage for such person shall be obligated
to collect the tax to the extent required by this chapter.

(b) Any person who contracts to perform services in this State and
is furnished tangible personal property for use under the contract by the
person, or his agent or representative, for whom the contract is performed,
and a sales or use tax has not been paid to this State by the person supply-
ing the tangible personal property, shall be deemed to be the consumer of
the tangible personal property so used, and shall pay a use tax based on
the fair market value of the tangible personal property so used, irrespec-
tive of whether or not any right, title or interest in the tangible personal
property becomes vested in the contractor; provided, however, that this
paragraph shall not apply to the industrial materials exclusion or the
other industrial exclusions set out in § 58-441.6, including those set out
in sub-paragraphs (h), (i) and (j) thereof, or the governmental exclusions
set out in sub-paragraph (p) thereof.

(c) Any person who contracts orally, in writing, or by purchase
order to perform any service in the nature of equipment rental, and the
principal part of that service is the furnishing of equipment or machinery
which will not be under the exclusive control of the contractor, shall be
liable for the sales or use tax on the gross proceeds from such contract to
the same extent as the lessor of tangible personal property.

(d) Tangible personal property incorporated in real property con-
struction which loses its identity as tangible personal property shall be
deemed to be tangible personal property used or consumed within the
meaning of this section.

(e) Nothing in this section shall be construed to affect or limit the
resale exclusion provided for in this chapter, or the industrial materials
and other industrial exclusions set out in § 58-441.6; nor shall anything
contained herein be construed to impose any sales or use tax with respect
to the use in the performance of contracts with the United States, this
State, or any political subdivision thereof, of tangible personal property
owned by a governmental body which actually is not used or consumed in
the performance thereof.

§ 58-441.16. Certificates of registration—(a) Every person desir-
ing to engage in or conduct business as a dealer in this State shall file with
the Commissioner an application for a certificate of registration for each
place of business in this State and shall pay the Commissioner therefor
a fee of five dollars for each such certificate.

(b) Every application for a certificate of registration shall be made
upon a form prescribed by the Commissioner and shall set forth the name
under which the applicant transacts or intends to transact business, the
location of his place or places of business, and such other information
as the Commissioner may require. The application shall be signed by the
owner if a natural person; in the case of an association or partnership,
by a member or partner; in the case of a corporation, by an executive
officer or some person specifically authorized by the corporation to sign
the application.

(c) When the required application has been made the Commissioner
shall issue to each applicant a separate certificate of registration for each
place of business within this State. A certificate of registration is not
assignable and is valid only for the person in whose name it is issued and
for the transaction of business at the place designated therein. It shall
be at all times conspicuously displayed at the place for which issued.

(d) Whenever any person fails to comply with any provision of this
chapter or any rule or regulation of the Commissioner relating thereto,
the Commissioner, upon hearing after giving such person ten days’ notice
in writing, specifying the time and place of hearing and requiring him
to show cause why his certificate of registration should not be revoked or
suspended, may revoke or suspend any one or more of the certificates of
registration held by such person. The notice may be personally served or
served by registered mail directed to the last known address of such person.
A dealer whose certificate of registration has been previously suspended
or revoked, shall pay the Commissioner a fee of ten dollars for the renewal
or re-issuance of a certificate of registration.

(e) Any person who engages in business as a dealer in this State
without obtaining a certificate of registration, or after a certificate of
registration has been suspended or revoked, and each officer of any cor-
poration which so engages in business shall be guilty of a misdemeanor;
and it shall be lawful to hold that each day’s continuance in business in
violation of this section constitutes a separate offense.

(f) If the holder of a certificate of registration ceases to conduct his
business at the place specified in his certificate, the certificate shall there-
upon expire; and such holder shall inform the Commissioner in writing
within thirty days after he has ceased to conduct such business at such
place that he has so ceased; provided, however, that if the holder of a
certificate of registration desires to change his place of business to another
place in this State, he shall so inform the Commissioner in writing and
his certificate shall be revised accordingly without charge.

(zg) This section shall also apply to any person who engages in the
business of furnishing any of the things or services taxable under this
chapter. Moreover, it shall apply to any person who is liable only for the
collection of the use tax, but any such person may be issued a certificate
of registration in relevant form without charge.

§ 58-441.17. Exemption certificates—(a) All sales or leases are
subject to the tax until the contrary is established. The burden of proving
that a sale, distribution, lease, or storage of tangible personal property
is not taxable is upon the person who makes the sale, distribution, lease,
or storage, unless he takes from the purchaser or lessee a certificate to
the effect that the property is exempt under this chapter.

(b) The certificate mentioned in this section shall relieve the person
who takes such certificate from any liability for the payment or collection
of the tax, except upon notice from the Commissioner that such certificate
is no longer acceptable. Such certificate shall be signed by and bear the
name and address of the purchaser or lessee, shall indicate the number
of the certificate of registration (if any) issued to the purchaser, or
lessee, shall indicate the general character of the tangible personal prop-
erty sold, distributed, leased, or stored (or to be sold, distributed, leased, or
stored under a blanket exemption certificate) and shall be substantially
in such form as the Commissioner may prescribe.

(c) Ifa purchaser or lessee who gives a certificate under this section
makes any use of the property other than an exempt use or retention,
demonstration, or display while holding property for resale, distribution,
or lease in the regular course of business, such use shall be deemed a taxa-
ble sale by the purchaser or lessee as of the time the property or service
is first used by him, and the cost of the property to him shall be deemed
the sales price of such retail sale. If the sole use of the property other
than retention, demonstration, or display in the regular course of business
is the rental of the property while holding it for sale, distribution, or lease,
the purchaser may elect to pay the tax on the amount of the rental charged,
rather than the cost of the property to him.

(d) If a purchaser gives a certificate under this section with respect
to the purchase of fungible goods and thereafter commingles these goods
with other fungible goods not so purchased, but of such similarity that
the identity of the constituent goods in the commingled mass cannot be
determined, sales or distributions from the mass of commingled goods
shall be deemed to be sales or distributions of the goods so purchased until
a quantity of commingled goods equal to the quantity of purchased goods
so commingled has been sold or distributed.

§ 58-441.18. Collection of tax.—The tax levied by this chapter shall
be paid by the dealer, but the dealer shall separately state the amount
of the tax and add such tax to the sales price or charge; and thereafter,
such tax shall be a debt from the purchaser, consumer, or lessee to the
dealer until paid and shall be recoverable at law in the same manner as
other debts, provided that no action at law or suit in equity under this
chapter may be maintained in this State by any dealer who is not regis-
tered under § 58-441.16 or is delinquent in the payment of the taxes
imposed under this chapter.

Notwithstanding any exemption from taxes which any dealer now or
hereafter may enjoy under the Constitution or laws of this or any other
State, or of the United States, such dealer shall collect such tax from the
purchaser, consumer, or lessee and shall pay the same over to the Com-
missioner as herein provided.

Any dealer who shall neglect, fail, or refuse to collect such tax upon
each and every taxable sale, distribution, lease, or storage of tangible per-
sonal property made by him, his agents, or employees shall be liable for
and pay the tax himself, and such dealer shall not thereafter be entitled to
sue for or recover in this State any part of the purchase price or rental
from the purchaser until such tax is paid. Moreover, any dealer who shall
neglect, fail or refuse to pay or collect the tax herein provided, either by
himself or through his agents or employees, shall be guilty of a misdemeanor.

§ 58-441.19. Absorption of tax prohibited.—No person shall advertise
or hold out to the public, in any manner, directly or indirectly, that he will
absorb all or any part of the sales or use tax, or that he will relieve the
purchaser, consumer, or lessee of the payment of all or any part of such tax,
except as may be authorized under § 58-441.18, § 58-441.14, or § 58-441.34.
Any person who violates this section shall be guilty of a misdemeanor.

§ 58-441.20. Returns by dealers.—Every dealer required to collect
or pay the sales or use tax shall, on or before the twentieth day of the month
following the month in which the tax shall become effective, transmit to the
Commissioner, upon a form prescribed, prepared and furnished by him,
a return showing the gross sales, gross proceeds, or cost price, as the case
may be, arising from all transactions taxable under this chapter during the
preceding calendar month; and thereafter a like return shall be prepared
and transmitted to the Commissioner by every dealer on or before the
twentieth day of each month, for the preceding calendar month. The return
also shall contain a statement showing the amount in each class of exclusions
and exemptions which are not subject to the tax imposed by this chapter,
or if the form so provides, the total amount thereof without specifying
each class. In the case of dealers regularly keeping books and accounts
on the basis of an annual period which varies fifty-two to fifty-three weeks,
the Commissioner may make rules and regulations for reporting consistent
with such accounting period.

§ 58-441.21. Payment to accompany dealer’s return.—At the time of
transmitting the return required under § 58-441.20 to the Commissioner,
the dealer shall remit to the Commissioner therewith the amount of tax due
under the applicable provisions of this chapter, after making appropriate
adjustments for purchases returned, repossessions, and accounts uncollect-
ible and charged off as provided in §§ 58-441.22, 58-441.28 and 58-441.24.
Failure so to remit such tax shall cause such tax to become delinquent,
that is to say, the tax imposed by this chapter shall for each month become
delinquent on the twenty-first day of the succeeding month if not there-

ore paid.

§ 58-441.22. Returned goods.—In the event purchases are returned
to the dealer by the purchaser or consumer after the tax imposed by this
chapter has been collected or charged to the account of the purchaser, the
dealer shall be entitled to reimbursement of the amount of tax so collected
or charged by him, in the manner prescribed by the Commissioner, but the
amount of tax so reimbursed to the dealer shall not include the tax paid
upon any cash retained by the dealer after such return of merchandise; and
in case the tax has not been remitted by the dealer, the dealer may deduct
the same in submitting his return. The dealer shall be issued an official
credit memorandum by the Commissioner equal to the net amount remitted
by the dealer for such tax collected. Such memorandum shall be accepted
at full face value from the dealer to whom it is issued when such dealer
remits subsequent taxes under the provisions of this chapter. In case the
dealer has retired from business and has filed a final return, a refund of
tax may be made if the dealer can establish that the tax was not due.

$ 58-441.28. Repossessions.—A dealer who has paid the tax on tan-
gible personal property sold under a retained title, conditional sale, or

ilar contract, may take credit for the tax paid by him upon the unpaid
balance due him when he repossesses the property, such credit to be re-
flected in the same manner as the credit for returned purchases under
§ 68-441.22. When such repossessed property is resold, such sale is subject
in all respects to this chapter.

§ 58-441.24. Bad debts—In any return filed under the provisions of
this chapter, the dealer may credit, under rules and regulations prescribed
by the Commissioner, against the tax shown to be due on the return, the
amount of sales or use tax previously returned and paid on accounts which
during the period covered by the current return have been found to be
worthless and actually charged off for income tax purposes; provided that
if any accounts so charged off are thereafter in whole or in part paid to the
dealer, the amount so paid shall be included in the first return filed after such
collection and the tax paid accordingly.

§ 58-441.25. Discount.—For the purpose of compensating a dealer
holding a certificate of registration under § 58-441.16 for accounting for and
remitting the tax levied by this chapter, such dealer shall be allowed three
per cent of the amount of tax due and accounted for in the form of a

in submitting his return and paying the amount due by him;
provided the amount due was not delinquent at the time of payment.

§ 58-441.26. Extensions.—The Commissioner for good cause may
grant an extension upon written application therefor to the end of the
calendar month in which any tax return is due hereunder, or for a period
not exceeding thirty days, and no interest or penalty shall be charged,
assessed or collected by reason of the granting of any such extension, except
that where any such extension is granted beyond the end of the calendar
month in which any tax return is due hereunder, interest on the tax at the
rate oF one-half of one per cent per month, or fraction thereof, shall be
charged.

§ 68-441.27. Civil penalties——When any dealer shall fail to make any
return and pay the full amount of the tax required by this chapter, there
shall be imposed, in addition to other penalties provided herein, a specific
penalty to be added to the tax in the amount of five per cent if the failure is
for not more than thirty days, with an additional five per cent for each
additional thirty days, or fraction thereof, during which the failure con-
tinues, not to exceed twenty-five per cent in the aggregate; provided, how-
ever, if such failure is due to providential or other good cause shown to the
satisfaction of the Commissioner, such return with remittance may be
accepted exclusive of penalties. In the case of a false or fraudulent return,
where willful intent exists to defraud the State of any tax due under this
chapter, a specific penalty of fifty per cent of the amount of the proper tax
shall be assessed. All penalties and interest imposed by this chapter shall
be payable by the dealer and collectible by the Commissioner in the same
manner as if they were a part of the tax imposed.

§ 58-441.28. Assessment based on estimate.—(a) In the event any
dealer fails to make a return as provided by this chapter, or makes a grossly
incorrect return, or a return that is false or fraudulent, it shall be the duty
of the Commissioner to make an estimate for the taxable period of the retail
sales or distributions of such dealer, or of the gross proceeds from leases of
tangible personal property, or taxable services by such dealer, or the cost
price of all articles of tangible personal] property imported by such dealer
for use or consumption in the State, or storage by such dealer of tangible
personal property to be used or consumed in the State, and assess the tax,
plus penalties. The Commissioner shall give such dealer ten days’ notice
in writing requiring such dealer to appear before him or an assistant with
such books, records, and papers as he may require relating to the business
of such dealer for such taxable period; and the Commissioner may require
such dealer or the agents and employees of such dealer to give testimony
or to answer interrogatories under oath administered by the Commissioner
or his assistants respecting such sale, distribution, lease, use, consumption,
or storage of tangible personal property, or taxable services, or the failure
to make a return thereof as provided in this chapter. If any dealer fails
to make any such return or refuses to permit an examination of his books,
records, or papers, or to appear and answer questions within the scope of
such investigation relating to the sale, distribution, lease, use, consumption,
or storage of tangible personal property, or taxable services, the Commis-
sioner is hereby authorized to make the assessment based upon such infor-
mation as may be available to him and to issue a warrant for the collection
of any such taxes and penalties so found to be due. The assessment so made
shall be deemed prima facie correct.

(b) If the dealer has imported the tangible personal property and
fails to produce an invoice showing the sales price of the articles, or the
invoice does not reflect the true or actual sales price as defined in this chap-
ter, then the Commissioner shall ascertain, in any manner feasible, the
true sales price and assess and collect the tax, with penalties, to the extent
such have accrued, on the true sales price as ascertained by him. The assess-
ment so made shall be deemed prima facie correct.

(c) Inthe case of the lease of tangible personal property, if the con-
sideration given or reported by the dealer, in the judgment of the Com-
missioner, does not represent the true or actual consideration, then the
Commissioner is authorized to fix the same and assess and collect the tax
thereon in the same manner as above provided, with penalties to the extent
such have accrued. The assessment so made shall be deemed prima facie

correct.

§ 58-441.29. Records—(a) Every dealer required to make a return
and pay or collect any tax under this chapter shall keep and preserve
suitable records of the sales, leases, or purchases, as the case may be,
taxable under this chapter, and such other books of account as may be
necessary to determine the amount of tax due hereunder, and such other
pertinent information as may be required by the Commissioner; and every
such dealer shall keep and preserve for a period of four years all invoices
and other records of goods, wares, and merchandise, or other subjects of
taxation under this chapter; and all such books, invoices, and other records
shall be open to examination at all reasonable hours by the Commissioner
or any of his duly authorized agents.

(b) In order to aid in the administration and enforcement of the
provisions of this chapter, all wholesalers and jobbers in this State hereby
are required to keep a record of all sales of tangible personal property,
whether such sales be for cash or on terms of credit. The records required
to be kept by all wholesalers and jobbers shall include the name and address
of the purchaser, the number of the certificate of registration issued to the
purchaser, the date of the purchase, the article purchased, and the price at
which the article is sold to the purchaser. These records shall be kept for
4 period of four years and shall be open to the inspection of the Commis-
sioner or his duly authorized agents at all reasonable hours during the day.
The failure of any wholesaler or jobber in this State to keep such records,
or the failure of any wholesaler or jobber in this State to permit an inspec-
tion of such records by the Commissioner as aforesaid, shall be a mis-
demeanor. Moreover, if any person who is both a retailer and a wholesaler
or jobber shall fail to keep proper records showing wholesale sales and
reall sales separately, he shall pay the tax as a retailer on both classes of

siness,

_ (c) For the purpose of enforcing the collection of the tax levied by
this chapter, the Commissioner hereby is specifically empowered through
his authorized agents to examine at all reasonable hours during the day
the books, records, and other documents of all transportation companies,
agencies, firms, or persons as defined herein that conduct their business
by truck, rail, water, airplane, or otherwise, in order to determine what

ers are importing or otherwise are shipping articles of tangible personal
property which are liable for the tax. In the event such transportation
company, agency, firm or person as defined herein, shall refuse to permit
such examination of its or his books, records, and other documents by the

ssioner, as aforesaid, it or he shall be deemed guilty of a misde.
meanor. Moreover, the Commissioner may proceed by citing such trans-
portation company, agency, firm, or person to show cause before any court
of record as to why such books, records, and other documents should not
examined pursuant to the injunction of the court, and as to why a bond
should not be required with proper security in the penalty of not more than
$2,000 conditioned upon compliance with the provisions hereof for a period
hot more than one year.

$ 58-441.30. Sale of business.—If any dealer liable for any tax,
penalty, or interest levied hereunder shall sell out his business or stock of
goods or shall quit the business, he shall make a final return and pay-
ment within fifteen days after the date of selling or quitting the business.
His successors or assigns, if any, shall withhold sufficient of the purchase
money to cover the amount of such taxes, penalties, and interest due and
unpaid until such former owner shall produce a receipt from the Commis-
sioner showing that they have been paid or a certificate stating that no
taxes, penalties, or interest are due. If the purchaser of a business or
stock of goods shall fail to withhold the purchase money as above provided,
he shall be personally liable for the payment of the taxes, penalties, and
interest due and unpaid on account of the operation of the business by any
former owner. Nothing herein shall be deemed to qualify or limit the
exemption as to such a sale as is covered by § 58-441.6(m).

§ 58-441.31. Bond.—The Commissioner may, when in his judgment it
is necessary and advisable so to do in order to secure the collection of
the tax levied by this chapter, require any person subject to such tax to
file with him a bond, with a surety company authorized to do business in
this State as surety, in such reasonable amount as the Commissioner may
fix, to secure the payment of any tax, penalty or interest due or which may
become due from such person. In lieu of such bond, securities approved by
the Commissioner may be deposited with the State Treasurer, which securi-
ties shall be kept in the custody of the State Treasurer, and shall be sold by
him, at the request of the Commissioner, at public or private sale, without
notice to the depositor thereof, if it becomes necessary so to do in order
to recover any tax, penalty or interest due the State under this chapter.
Upon any such sale, the surplus, if any, above the amounts due under this
chapter shall be returned to the person who deposited the securities.

§ 58-441.82. Jeopardy assessment.—If the Commissioner is of the
opinion that the collection of any tax or any amount of tax, required to
be collected and paid under this chapter, will be jeopardized by delay, he
shall make an assessment of the tax or amount of tax required to be col-
lected and shall mail or issue a notice of such assessment to the taxpayer
together with a demand for immediate payment of the tax or of the defi-
ciency in tax declared to be in jeopardy including penalties. In the case of
a tax for a current period, the Commissioner may declare the taxable
period of the taxpayer immediately terminated and shall cause notice of
such finding and declaration to be mailed or issued to the taxpayer together
with a demand for immediate payment of the tax based on the period
declared terminated and such tax shall be immediately due and payable,
whether or not the time otherwise allowed by law for filing a return and
paying the tax has expired. Assessments provided for in this section shall

ome immediately due and payable, and if any such tax, penalty or
interest is not paid upon demand of the Commissioner, he shall proceed to
collect the same by legal process, or, in his discretion, he may require the
taxpayer to file such bond as in his judgment may be sufficient to protect
the interest of the State.

§ 58-441.38. Direct payment permits——(a) Notwithstanding any
other provision of this chapter, the Commissioner may authorize a manu-
facturer, mine operator, or public service corporation that is a user, con-
sumer, distributor, or lessee to which sales, distributions, leases, or storage
of tangible personal property are made under circumstances which normally
make it impossible at the time thereof to determine the manner in which
such property will be used by such person, or any person who stores
tangible personal property in this State for use both within and outside
this State, to pay any tax levied by this chapter directly to this State and
waive the collection of the tax by the dealer; but no such authority shall be
granted or exercised except upon application to the Commissioner and the

uance by the Commissioner of a direct payment permit. If a direct
payment permit is granted, then payment of the tax on all sales, distribu-
tions, and leases, including sales, distributions, leases, and storage of tan-
gible personal property and sales of taxable services for use known at the
ue thereof, shall be made directly to the Commissioner by the permit
older.

(b) On or before the twentieth day of each month every permit
holder shall make and file with the Commissioner a return for the preced-
ing month in the form prescribed by the Commissioner showing the total
value of the tangible personal property so used, the amount of tax due from
the permit holder (which amount shall be paid to the Commissioner with
such return) and such other information as the Commissioner deems
necessary. The Commissioner, upon written request by the permit holder,
may grant a reasonable extension of time for making and filing returns
and paying the tax. Interest on such tax shall be chargeable on every such
extended payment at the rate of one-half of 1% per month or fraction

(c) It shall be the duty of every permit holder required to make a
return and pay any tax under this section to keep and preserve suitable
records of purchases, together with invoices of purchases, bills of lading,
and other such pertinent records and documents in such form as the Com-
missioner requires by regulation. All such records and other documents
shall be open during business hours to the inspection of the Commissioner
or his duly authorized agents and shall be preserved for a period of four
years, unless the Commissioner, in writing, has authorized their destruc-
tion or disposal at an earlier date.

(d) A permit granted pursuant to this section shall continue to be
valid until surrendered by the holder or cancelled for cause by the Com-
missioner.

(e) Persons who hold a direct payment permit which has not been
cancelled shall not be required to pay the tax to the dealer as otherwise
herein provided. Such persons shall notify each dealer from whom pur-
chases or leases of tangible personal property are made of their direct
payment permit number and that the tax is being paid directly to the
Commissioner. Upon receipt of such notice, such dealer shall be absolved
from al] duties and liabilities imposed by this chapter for the collection
and remittance of the tax with respect to sales, distributions, leases, or
storage of tangible personal property to such permit holder. Dealers who
make sales upon which the tax is not collected by reason of the provisions
of this section shall maintain records in such manner that the amount
involved and identity of each such purchaser may be ascertained.

(f) Upon the cancellation or surrender of a direct payment permit,
the provisions of this chapter, without regard to this section, shall there-
after apply to the person who previously held such permit, and such person

promptly so notify in writing dealers from whom purchases, leases,
and storage of tangible personal property are made of such cancellation
or surrender. Upon receipt of such notice, the dealer shall be subject to
the provisions of this chapter, without regard to this section, with respect
to all sales, distributions, leases, or storage of tangible personal property
thereafter made to such person.

§ 58-441.34. Vending machine sales.—Whenever a dealer makes sales
of tangible personal property through vending machines, or in any other
manner making collection of the tax impractical, the Commissioner may
authorize such dealer to prepay the tax and waive collection from the
purchaser and may require such dealer to furnish bond sufficient to secure
prepayment of the tax. Such dealer shall be required to print upon the
property sold or post on the vending machine a statement to the effect
that the tax has been paid in advance. The terms and conditions of this
section shall be inapplicable unless the dealer shall make application to
the Commissioner for the authority herein contained, and unless the Com-
missioner shall find that the collection of the tax in the manner otherwise
provided in this chapter is impractical. In the case of authority granted
under this section, and for as long as such dealer waives collection from
the purchaser hereunder, such dealer shall be required to remit only an
amount equal to 2% of his gross sales from vending machines in which
all items are sold for more than ten cents; provided, however, that on and
after July 1, 1968, such dealer shall be required to remit only an amount
equal to 8% of his gross sales from vending machines in which all items
are sold for more than ten cents. The next preceding sentence shall not
apply to any dealer who fails to maintain records satisfactory to the
Commissioner. A dealer making sales of tangible personal property
through vending machines shall apply for and obtain a certificate of regis-
tration under § 58-441.16 in relevant form for each county and city in
which he has such machines.

§ 58-441.85. Bad checks.—If any check tendered for any amount
due under this chapter be not paid by the bank on which it is drawn, the
person by whom such check was tendered shall remain liable for the
payment of such amount the same as if such check has not been tendered.
Moreover, if such person shall fail to pay the Commissioner the amount
due the State within five days after the Commissioner has given him
written notice by registered or certified mail or in person by an agent
that such check was returned unpaid, the person by whom such check
was tendered shall be guilty of a misdemeanor, and on conviction thereof
the fine shall not be less than twenty-five dollars.

§ 58-441.386. Tax warrants.—The Commissioner is empowered, when
any tax becomes delinquent under this chapter, to issue a warrant for the
collection of the tax, penalty and interest from each delinquent taxpayer.
§§ 58-41, 58-42, and 58-43 shall apply to such warrants, except that the
same may be issued as soon as the tax becomes delinquent.

§ 58-441.37. Erroneous assessments.—Upon any claim of an errone-
ous or illegal assessment or collection the taxpayer shall have his remedy
under the Code of Virginia, §§ 58-1118, 58-1119 and 58-1121, and §§ 58-1180
through 58-1139. The sections cited are hereby made applicable to all
sales and use taxes imposed under this chapter. The Commissioner may
act under §§ 58-1118 and 58-1119 whether or not an application for the
correction of an erroneous assessment is filed.

§ 58-441.38. Period of limitations.—The taxes imposed by this chap-
ter shall be assessed within three years from December 81 of the year in
which such taxes became due and payable; provided, however, in the case
of a false or fraudulent return with intent to evade payment of the taxes
imposed by this chapter, or a failure to file a return, the taxes may be
assessed, or a proceeding in court for the collection of such taxes may be
begun without assessment, at any time within six years from December
81 of the year in which such taxes became due and payable.

§ 58-441.39. Violation of chapter by dealer a misdemeanor when.—
Any dealer subject to the provisions of this chapter failing or refusing to
furnish any return herein required to be made, or failing or refusing to
furnish a supplemental return or other data required by the Commissioner,
or who makes a false or fraudulent return with intent to evade the tax
hereby levied, or who makes a false or fraudulent claim for refund, or
who gives or knowingly receives a false or fraudulent exemption certificate,
or who shall violate any other provision of this chapter, punishment for
which is not otherwise herein provided, shall be guilty of a misdemeanor.

§ 58-441.40. Administration of chapter—The Commissioner shall
administer and enforce the assessment and collection of the taxes and penal-
ties imposed by this chapter. He shall design, prepare, print and furnish
to all dealers, or make available to them, all necessary forms for filing
returns together with instructions to insure a full collection from dealers
and an accounting for the taxes due, but failure of any dealer to receive
or procure such forms or instructions, or both, shall not relieve him from
the payment of the tax at the time and in the manner herein provided.

§ 58-441.41. Rules and regulations.—The Commissioner shall have
the power to make and publish reasonable rules and regulations not incon-
sistent with this chapter, or the other applicable laws, or the Constitution
of this State, or of the United States, for the enforcement of the provisions
of this chapter and the collection of the revenues hereunder. Such rules
and regulations shall not be subject to Chapter 1.1 of Title 9 of the Code
of Virginia, the short title of which is ‘‘General Administrative Agencies
Act.” The Commissioner shall promulgate and publish sales tax deduc-
tion guides for the purpose of aiding the taxpayer in calculating allowable
deductions under subsection (c) of § 58-81, relevant to income taxes, which
guides shall be based on the following factors: size of income, size of
family, and rate of tax. The guides so promulgated shall not preclude any
taxpayer from claiming as a deduction the amount of taxes, levied under the
provisions of this chapter, actually paid by him.

§ 58-441.42. Administration of oaths.—The Commissioner and such
other officers or employees of the Department of Taxation as the Commis-
sioner may authorize in writing, may administer oaths for the purpose of
enforcing and administering the provisions of this chapter.

§ 58-441.43. Secrecy of information.—Except in accordance with
proper judicial order, or as otherwise provided by law, it shall be unlawful
for the Commissioner or any agent, auditor, or other officer or employee
to divulge or make known in any manner the amount of sales, the amount
of tax paid or any other particulars set forth or disclosed in any return
required by this chapter. Nothing herein contained shall be construed to
prohibit the publication of statistics so classified as to prevent the identity
of particular reports or returns and the items thereof, or the inspection by
the legal representative of this State of the report or return of any taxpayer
who shall apply for a review or appeal from any determination or against
whom an action or proceeding is about to be instituted or has been instituted
to recover any tax or penalty imposed by this chapter.

§ 58-441.44. Personnel, supplies, equipment, other expenses, office
space.—The Commissioner may employ all necessary personnel and purchase
such supplies and purchase or rent such equipment and incur such other
expenses as may be necessary for the administration of this chapter. All
such costs and expenses shall be paid out of appropriations made to the
Department of Taxation. Unless adequate office space is provided in a State-
owned building for the administration of this chapter, the Commissioner
is hereby authorized to rent quarters for the purpose, and the cost thereof
shall be paid as a part of the cost of administering this chapter.

§ 58-441.45. Cost of administration.—The cost incurred by the Com-
missioner in administering this chapter shall be paid out of such appro-
priation therefor as may be made by law. In administering this chapter,
however, the Commissioner shall utilize existing personnel and facilities
to the extent that this can be reasonably done without detriment to other
necessary activities of the Department of Taxation.

§ 58-441.46. Severability.—If any provision of this chapter be held
unconstitutional or invalid by a court of competent jurisdiction the same
shall not affect the remaining provisions of this chapter but all such pro-
visions not held unconstitutional or invalid shall remain in full force and
effect. If, however, a court of competent jurisdiction should hold that the
sales tax or the use tax levied by this chapter is for any reason invalid in
its relationship to national banks, it is hereby provided that State banks
shall thenceforth enjoy immunity from such tax or taxes to the same
extent as national banks.

§ 58-441.47. Effective date of tax.—The taxes imposed by this chap-
ter shall be in full force and effect on and after September first, nineteen
hundred sixty-six, except that the increase in the rate of the tax from
two per cent to three per cent shall be in force on and after July first, nine-
teen hundred sixty-eight.

§ 58-441.48. Disposition of State sales and use tax revenue; localities’
share.—All State tax moneys collected by the Commissioner under the pre-
ceding sections of this chapter shall be paid into the general fund of the
State treasury.

(a) The Comptroller shall designate for all such State sales and use
tax revenue collected under the preceding sections of this chapter a specific
revenue code number, and another specific revenue code number for the
registration fees collected under § 58-441.16.

(b) For the taxable period beginning September 1, 1966, and ending
June 30, 1968, one-half of the net revenue derived under the preceding sec-
tions of this chapter, and for the taxable period beginning July 1, 1968, and
continuing indefinitely, one-third of the net revenue derived under the
preceding sections of this chapter, shall be distributed among the counties
and cities of this State in the manner hereafter in this section provided.

(c) The localities’ share of the net revenue distributable under this
section among the counties and cities shall be apportioned by the Comp-
troller and distributed among them by warrants of the Comptroller drawn
on the Treasurer of Virginia as soon as practicable after the close of each
month during which the net revenue was received into the State treasury.
The first distribution shall be made in November, 1966, or as soon there-
after as practicable, and shall cover the localities’ share of such net revenue
received into the State treasury during the month of September, 1966, if
any, and during the month of October, 1966; and thereafter the distribution
of the localities’ share of such net revenue shall be computed with respect
to the net revenue received into the State treasury during each month, and
such distribution shall be made as soon as practicable after the close of
each such month.

(d) The net revenue so distributable among the counties and cities
shall be apportioned and distributed upon the basis of the school age popula-
tion of the respective counties and cities, as certified to the Comptroller by
the Department of Education, that is to say, upon the basis of the number
of children between the ages of seven and twenty years in each county and
city according to the most recent State-wide census of such population as
has been, or may be, caused to be taken by the Department of Education,
as adjusted in the manner hereinafter provided. No special school popu-
lation census, other than a State-wide census, shall be used as the basis
of apportionment and distribution except that in any calendar year in
which a State-wide census is not reported, the Department of Education
shall adjust such school age population figures by the same percentum
of annual change in total population estimated for each locality by the
Bureau of Population and Economic Research of the University of Virginia.
The revenue so apportionable and distributable is hereby appropriated to
the several counties and cities for maintenance, operation, capital outlays,
debt and interest payments, or other expenses incurred in the operation
of the free public schools, which shall be considered as funds raised from
local resources; provided, however, 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 maintenance, operation, capital outlays, debt and interest
payments, or other expenses incurred in the operation of the free public
schools, the proper proportionate amount received by him in the ratio
that the school age population of such town bears to the school age popu-
lation of the entire county. If the school age population of any city, or
town constituting a separate school district, is increased by the annexation
of territory since the last preceding school age population census, such
increase shall, for the purposes of this section, be added to the school
age population of such city or town as shown by the last such census and
a proper reduction made in the school age population of the county or
counties from which the annexed territory was acquired.

(e) If errors are made in any distribution, or adjustments are other-
wise necessary, the errors shall be corrected and adjustments made in the
distribution for the next quarter or for subsequent quarters.

(f) The term “net revenue,” as used in this section, means the gross
revenue received into the general fund of the State treasury under the
preceding sections of this chapter, less (1) refunds to taxpayers, and (2)
registration fees collected under § 58-441.16.

§ 58-441.49. Cities and counties may levy local sales taxes to what
extent and under what conditions; collection thereof by State and return of
revenue to each city or county entitled thereto.—(a) No city, town, or
county shall impose or continue to impose any local general sales or use
tax or any local general retail sales or use tax after the State tax imposed
by this chapter becomes effective, except as authorized by this section.
Nothing contained in this chapter, however, shall be construed as impairing
in any way the authority conferred upon any city, town or county by any
other statute including charter provisions to impose local license taxes or
other local taxes not intended to be separately stated or required to be
passed on to the consumer, except that any locality may impose or con-
tinue to impose local excise taxes on cigarettes, local admissions taxes,
local taxes on transient room rentals and meals, and consumer utility taxes
to the extent authorized by law, whether such locality acts under subpara-
graph (b) of this section or not; but no city, town or county shall impose
or continue to impose any local general sales or use tax or any local general
retail sales or use tax after the State tax imposed by this chapter becomes
effective, except as authorized by this section. The terms “local general
sales or use tax” and “local general retail sales or use tax” do not include
local retail merchants’ license taxes of the nature heretofore levied b
various localities, the same being in principle the same as the State reta
merchants’ license tax which is being discontinued on and after January
1, 1967; nor do such terms include local wholesale merchants’ license taxes
measured by purchases, the same being in principle the same as the State
wholesale merchants’ license tax which is being discontinued on and after
January 1, 1967; provided that no city, town or county shall impose any
such local wholesale merchants’ license tax at an aggregate rate in excess
of five cents per one hundred dollars of purchases except in those localities
where the local rate in effect on January 1, 1964, was in excess of such
rate, in which case such localities are hereby prohibited from increasing
such rate as in effect on January 1, 1964.

(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 per cent 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 the preceding sections of this
chapter and shall be subject to all the provisions of this chapter, and all
amendments hereof, and the rules and regulations published with respect
thereto, except that the applicable brackets of prices shall be as prescribed
in §§ 58-441.50 and 58-441.51 for the combined State and local tax, and
except that no discount under § 58-441.25 shall be allowed on a local sales tax.

_(c) 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 sixty days after its adoption. Any such ordinance may be
adopted prior to the effective date of this chapter. A certified copy of such
nance shall forthwith be forwarded to the Commissioner so that it
be received within five days after its adoption. No local sales tax
osed under this section shall become effective earlier than September

(d) Any local sales tax levied under this section shall be administered
collected by the Commissioner in the same manner and subject to the
e penalties as provided for the State sales tax, with the adjustments
red by §§ 58-441.50 and 58-441.51.

(e) All local sales tax moneys collected by the Commissioner under
section shall be paid into the State treasury to the credit of a special
1 which is hereby created on the Comptroller’s books under the name
lections of Local Sales Taxes”; and such local sales tax moneys shall
redited to the account of each particular city or county levying a local
3 tax under this section. The basis of such credit shal] be the city or
ity in which the sales were made as shown by the records of the Depart-
t of Taxation and certified by it monthly to the Comptroller, namely, the
or county of location of each place of business of every dealer paying the
to the State without regard to the city or county of possible use by the
chasers. If a dealer has any place of business Jocated in more than one
‘ical subdivision by reason of the boundary line or lines passing through
| place of business, the amount of sales tax paid by such a dealer with
ect to such place of business shall be treated for the purposes of this
ion as follows: one-half shall be assignable to each political subdivision
re two are involved, one-third where three are involved, and one-fourth
re four are involved.

(f) Assoon as practicable after the local sales tax moneys have been
| into the State treasury in any month for the preceding month, the
iptroller shall draw his warrant on the Treasurer of Virginia in the
ver amount in favor of each city or county entitled to the monthly return
ss local sales tax moneys, and such payments shall be charged to the
unt of each such city or county under the special] fund created by this
ion. If errors are made in any such payment, or adjustments are other-
. necessary, whether attributable to refunds to taxpayers, or to some
r fact, the errors shall be corrected and adjustments made in the pay-
t for the next month or for subsequent months.

(g) Such payments to counties are subject to the qualification that
ny county wherein is situated any incorporated town constituting a
ial school district and operated as a separate schoo) district under a
i school board of three members appointed by the town council, the
ity treasurer shall pay into the town treasury for general] governmental
90ses the proper proportionate amount received by him in the ratio that
schoo] age population of such town bears to the school age population
1e entire county. If the school age population of any town constituting
parate school district is increased by the annexation of territory since
last preceding school age population census, such increase shall, for the
0ses of this section, be added to the school age population of such town
10wn by the last such census and a proper reduction made in the school
population of the county or counties from which the annexed territory
acquired.

(h) One-half of such payments to counties are subject to the further
ification, other than as set out in paragraph (g) above, that in any
ity wherein is situated any incorporated town not constituting a
rate special school district which has comnlied with its charter pro-
ms providing for the election of its council and mayor for a period
t least four years immediately prior to the adoption of the sales tax
nance, the county treasurer shall pay into the town treasury of each
. town for general governmental purposes the proper proportionate
unt 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 State-wide school census. If the school age population of any
such town not constituting a separate special schoo] district is increased
by the annexation of territory since the last preceding school age popula-
tion census, 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 census
and a proper reduction made in the school age population of the county
or counties from which the annexed territory was acquired.

(i) It is further provided that if any incorporated town which
would otherwise be eligible to receive funds from the county treasurer
under paragraph (g) or (h) of this section be located in a county which
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 per cent
to provide revenue for the general fund of the town, subject to all the pro-
visions of this section generally applicable to cities and counties. Any tax
levied under the authority of this paragraph 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.

§ 68-441.50. Bracket system for combined State and local tax under
State rate of two per cent and local rate of one per cent.—Beginning with
the effective date of the State tax imposed by this chapter at the rate of
two per cent, and ending June 30, 1968, the following brackets of prices
shall be used for the collection of the combined State and local tax:

$0.01 to $0.14 no tax

15 to .44 1¢ tax

45 to .74 2¢ tax

15 to 1.14 8¢ tax
1.15 to 1.49 4¢ tax
1.50 to 1.84 Bb¢ tax
1.85 to 2.14 6¢ tax
2.15 to 2.49 7¢ tax
2.60 to 2.84 8¢ tax
2.85 to 3.14 9¢ tax
3.15 to 3.49 10¢ tax
3.50 to 3.84 11¢ tax
3.85 to 4.14 12¢ tax
4.15 to 4.49 13¢ tax
4.50 to 4.84 14¢ tax
4.85 to 6.00 15¢ tax

On transactions over five d
ollars, the tax shall be computed at a straight

oe Pee a one-half cent or more being treated as one cent. The fore-

incerta et system shall not relieve the dealer from the duty and liability

remit ‘
provided in this chan Baus to three per cent of his gross taxable sales as

State etl Bracket system for combined State and local tax under
July 1, 1968, the follac: cent and local rate of one per cent.—On and after

e combined State ne brackets of prices shall be used for the collection
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a.

4.85 to 56.00 20¢ tax
On transactions over five dollars, the tax shall be computed at a straight
four per cent, one-half cent or more being treated as one cent. The fore-
going bracket system shall not relieve the dealer from the duty and liability
to remit an amount equal to four per cent of his gross taxable sales as pro-
vided in this chapter.
2. That §§ 58-304, 58-304.1, 58-305, 58-306, 58-307, 58-808, 58-309,
58-310, 58-311, 58-312, 58-318, 58-814, 58-315, 58-816, 58-317, 58-317.1,
58-818, 58-319, 58-320, 58-320.1, 58-321, 58-321.1, 58-322, 58-323, 58-824,
58-825, 58-326, 58-327, 58-328, 58-329, 58-330, 58-331, 58-332, 58-3338, 58-334,
58-335, 58-336, 58-337, 58-338 and 58-339 of the Code of Virginia, all of
which sections relate to State wholesale and retail merchants’ license taxes,
are repealed as of January first, nineteen hundred sixty-seven. The
repeal of the State merchants’ license taxes shall not operate to subject
any wholesale merchant to a State peddlers’ license tax if he would be
exempt from such tax under § 58-346 but for such repeal.
3. That § 58-418, as amended, of the Code of Virginia be amended and
reenacted as follows:

§ 58-418. Rate of tax on capital.—On all capital as defined by §§ 58-
410 through 58-417, there is hereby annually levied a tax of * thirty cents
on every one hundred dollars of the actual value thereof. *

This section, as hereby amended, shall apply to the tax year beginning
January first, nineteen hundred sixty-seven and to every tax year there-
after until otherwise provided by law.