What did Northern Virginia repair providers have to do immediately after the regional repair tax was invalidated?

Subject

Tax on Motor Vehicle Repair Labor and Services in the Northern Virginia Transportation Authority

Plain-English summary

Virginia directed repair-service providers to stop collecting the Northern Virginia repair tax immediately. The Supreme Court of Virginia had ruled that day that the House Bill 3202 provisions allowing the regional authority to impose taxes and fees were unconstitutional and invalid.

The bulletin said the already imposed regional taxes and fees were null and void. It did not affect the separate motor-vehicle fuel sales tax in the Northern Virginia Transportation District and Potomac and Rappahannock Transportation Commission member localities, or Virginia's general retail sales and use tax.

What this means for you

• This was the Department's immediate February 29, 2008 stop-collection notice.
• It concerned the regional repair tax, not the separate fuel tax or ordinary retail sales tax.
• The bulletin is historical rather than current filing guidance.

Citations and references

• Virginia Tax Bulletin 08-3.
• House Bill 3202, 2007 Va. Acts ch. 896, as described in the bulletin.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 08-20

Original ruling text

TAX BULLETIN 08-3
Virginia Department of Taxation

February 29, 2008

IMPORTANT INFORMATION REGARDING

THE TAX ON MOTOR VEHICLE REPAIR LABOR AND SERVICES IN THE NORTHERN VIRGINIA TRANSPORTATION AUTHORITY

On February 29, 2008, the Virginia Supreme Court ruled that the provisions in House Bill 3202 ( Acts of Assembly 2007, Chapter 896) that permitted the Northern Virginia Transportation Authority to impose regional taxes and fees violated the Constitution of Virginia and are invalid. The Virginia Supreme Court held that the taxes and fees that the Northern Virginia Transportation Authority has already imposed are therefore null and void.

The Department of Taxation (“TAX”) is responsible for the administration and collection of the Motor Vehicle Repair Labor and Services Sales and Use Tax (“Repair Tax”) imposed by the Northern Virginia Transportation Authority. All providers of repair services should stop collecting the Repair Tax effective immediately .

The Motor Vehicle Fuel Sales Tax imposed in the Northern Virginia Transportation District and in the member localities of the Potomac and Rappahannock Transportation Commission is not affected by this ruling. The Virginia Retail Sales and Use Tax is also not affected by this ruling.

Please frequently check TAX’s website, www.tax.virginia.gov , for updated information as more guidance regarding this matter becomes available.

If you have any questions please contact TAX at (804) 367-8037.