Taxation Position Statements - 2010 Legislative Program
In 2007, a new telecommunications tax law repealed a number of local taxes and replaced them with a statewide communications tax. Local governments should be guaranteed, on a locality-by-locality basis, tax revenues equivalent to their FY 2006 percentage share of total statewide telecommunication tax revenues, with the amount of new tax generated for each locality to be equivalent to such telecommunication tax revenue received in FY 2006. While the Virginia Auditor of Public Accounts has determined that statewide collections of the communications tax in FY 2008 exceeded that of the repealed taxes by $1.9 million, it may not be the case that revenue neutrality for localities has been reached, as the analysis did not factor in tax collections totaling an estimated $16.3 million that were later discovered to be levied in error, and are to be refunded to the service provider. Additionally, changes in market area, customers served, and new technologies must continue to be examined within the context of the recently-enacted law, to ensure a modern communications tax system for localities which reflects and reacts to an ever-changing landscape.
(Revises previous position.)
Oppose any changes to the basis for calculating recordation and grantor’s taxes that would either reduce revenue to the state and localities or increase the possibility for fraud. At the direction of budget language adopted in 2009, a workgroup of stakeholders is currently examining the possible effects of changing the basis for calculation of the tax.