Communications Sales Tax

Under legislation enacted by the 2006 General Assembly, House Bill 568, the new Virginia communications sales and use tax, also referred to as the communications sales tax, will replace most of the current state and local taxes and fees on communications services, effective January 1, 2007. The new communications sales tax, which is imposed on the charge for or sale of communications services at the rate of 5%, will generally be collected from consumers by their service providers and remitted to the Department of Taxation each month, beginning with the month of January 2007. In cases where a consumer purchases taxable communications services and no tax is collected from the consumer on the purchase by the service provider, the consumer will be responsible for paying a communications use tax.

Also, a uniform statewide E-911 tax of $0.75 per line will replace the local E-911 taxes currently imposed for landline telephone service. In addition, the public rights-of-way use fee currently imposed on landline telephone service will now be imposed on cable television service. House Bill 568 also changes the way that cable service providers will pay the franchise fees on their local cable franchise agreements.

For more information, please visit the Virginia Department of Taxation's Website.