Did the Hampton Roads repair and motor-vehicle fuel taxes scheduled for May 1, 2008 ever take effect?

Subject

Motor vehicle repair labor and services sales and use tax (Repair Tax) and motor vehicle fuel sales tax NOW INVALID

Plain-English summary

Virginia announced that the Hampton Roads repair tax and regional motor-vehicle fuel sales tax would not take effect. The Supreme Court of Virginia had ruled on February 29, 2008 that the House Bill 3202 provisions allowing the regional authorities to impose taxes and fees violated the Virginia Constitution.

The two Hampton Roads taxes were scheduled to begin May 1, 2008. Because the enabling provisions were invalid, businesses were instructed not to collect either tax.

What this means for you

• This bulletin prevented collection of two regional taxes before their scheduled 2008 start date.
• It is historical guidance and does not state current Hampton Roads tax rules.
• The ruling concerned regional authority taxes authorized by House Bill 3202.

Citations and references

• Virginia Tax Bulletin 08-5.
• House Bill 3202, 2007 Va. Acts ch. 896, as described in the bulletin.

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 08-24

Original ruling text

TAX BULLETIN 08-5
Virginia Department of Taxation

March 13, 2008

IMPORTANT INFORMATION REGARDING
THE HAMPTON ROADS TRANSPORTATION AUTHORITY

Motor vehicle repair labor and services sales and use tax (“Repair Tax”) and motor vehicle fuel sales tax

NOW INVALID

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 and the Hampton Roads Transportation Authority to impose regional taxes and fees violated the Constitution of Virginia and are invalid.

The Department of Taxation (“TAX”) is responsible for the administration and collection of both the Motor Vehicle Repair Labor and Services Sales and Use Tax (“Repair Tax”) and the Motor Vehicle Fuel Sales Tax in the Hampton Roads Transportation Authority. Therefore, the Repair Tax and the Motor Vehicle Fuel Sales Tax imposed by the Hampton Roads Transportation Authority should not be collected.

The taxes and fees that the Hampton Roads Transportation Authority is authorized to impose by House Bill 3202 are not scheduled to take effect until May 1, 2008. As a result of the Virginia Supreme Court’s decision, these taxes will not become effective as scheduled.

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.