I run a flower shop that sells arrangements in glass and metal vases — do I owe Virginia's litter tax just because those containers are on the taxable products list?

Plain-English summary

A florist selling flower arrangements, plants, gifts, and delivery services had filed and paid Virginia's litter tax every year since 1996. After the Department assessed late-filing penalties for its 2017 through 2021 returns (filed and paid late), the florist pushed back harder: it argued it had never actually been subject to the litter tax at all, and asked for a refund of every dollar of litter tax it had ever remitted.

What the litter tax covers — and the incidental-sales exception. Virginia's annual litter tax (§ 58.1-1707 A) applies to manufacturers, wholesalers, distributors, and retailers of a specific list of products (§ 58.1-1708): food, groceries, tobacco, beverages, newspapers, cleaning products — and, notably, glass, metal, or plastic containers and paper products. Flowers themselves aren't on that list, but a florist's arrangements are commonly sold IN containers that are. The Department has long held, though, that the tax does NOT apply to a business that sells taxable-category items only incidentally to its actual business (P.D. 16-216). Checking the florist's website and operations, the Department found it sold glass, metal, or plastic vases and paper products only as part of its flower arrangements — never separately. Its primary business was flowers, and the containers were incidental to that business. Result: the litter tax simply never applied to this florist, for any of the years at issue.

The refund reached back three years, not further. Even though the tax was never owed, Virginia's refund rules still limit how far back a claim can go. Under § 58.1-1824, a protective claim for refund must be filed within three years of when the tax was assessed (or paid), and 23 VAC 10-20-190 A 1 requires the relevant tax, penalty, and interest to be paid in full first. The florist's refund request landed on December 9, 2022. Its 2016 litter tax return had been filed and paid back in May 2017 — more than three years before the claim, so that year (and everything before it) was outside the window and couldn't be refunded, however unnecessary the original payment turned out to be. But the 2017 through 2020 returns (tax and penalties paid in January 2022) and the 2021 return (tax paid August 2022, penalty satisfied December 2022) all fell within the three-year window measured from those later payment dates.

Result: a partial-but-substantial refund. Because the florist was never liable for the litter tax in the first place, and its 2017-2021 payments were timely claimed, the Department ordered refunds of the erroneously paid litter tax AND the late-filing penalties for those years, plus statutory interest — but nothing for 2016 or earlier.

What this means for you

Retailers who incidentally sell litter-tax-listed containers

If your core business isn't one of the litter tax's enumerated product categories, but your product happens to come packaged in glass, metal, or plastic containers (or paper), you may not owe the tax at all — the test is whether selling those containers is truly incidental to your real business, not whether the container itself appears on the statutory list.

If you've been paying a tax you may never have owed

File your refund claim as soon as you realize the error. Virginia's three-year window runs from when each year's tax was actually assessed or paid — waiting even one extra year can permanently cut off your earliest years' refunds, even though the underlying tax was never truly owed.

Accountants and tax professionals

Litter tax registration and filing habits can persist for decades (this florist had filed since 1996) without anyone re-examining whether the underlying liability was ever correct. It's worth periodically re-checking clients' litter tax registrations against the incidental-sales exception, especially for retailers whose core product isn't itself on the enumerated list.

Common questions

Q: Does selling anything on the litter tax's product list automatically make my business subject to the tax?
A: No — if those items are sold only incidentally to your real business (not as their own product line), the litter tax doesn't apply, per Department precedent.

Q: I've overpaid a tax for years — can I get all of it back?
A: Only for years within Virginia's three-year refund window, measured from when each year's tax was assessed or paid. Earlier years are barred even if the tax was never actually owed.

Q: Does it matter whether I ask for a refund or file an amended return?
A: The ruling applies the same three-year, full-payment-first framework under § 58.1-1824 regardless of how the request is styled.

Q: What's an example of a business that WOULD owe litter tax on containers?
A: A business that sells glass, metal, or plastic containers or paper products as their own product line — not merely as packaging incidental to something else it primarily sells.

Citations and references

Statutes and regulations:

• Va. Code § 58.1-1707 A — annual litter tax on manufacturers, wholesalers, distributors, and retailers of enumerated products
• Va. Code § 58.1-1708 — list of products subject to the litter tax
• Va. Code § 58.1-1824 — protective claim for refund (three-year deadline)
• 23 VAC 10-20-190 A 1 — full payment required before filing a protective claim

Prior rulings the Department relied on (described here, not linked): P.D. 86-224 (11/3/1986) (three-year protective-claim window) and P.D. 16-216 (12/22/2016) (incidental-sales exception to the litter tax).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-17

Original ruling text

February 12, 2025

Re: § 58.1-1821 Application: Litter Tax

Dear *:

This is in response to your letter submitted on behalf of * (the “Taxpayer”) in which you seek a refund of litter tax remitted for tax years 2017 through 2021.

FACTS

The Taxpayer, a florist that provides flower arrangements, plants, gifts, and delivery services, has filed litter tax returns since 1996. Litter tax returns were filed and paid late for the 2017 through 2021 tax years and late filing penalties were assessed. The Taxpayer paid the penalty assessments and filed an application for correction contending that it was not subject to litter tax and is eligible for refunds of all litter tax it has remitted.

DETERMINATION

Litter Tax

In accordance with Virginia Code § 58.1-1707 A, an annual litter tax is levied and imposed upon every person in the Commonwealth engaged in business as a manufacturer, wholesaler, distributor, or retailer of products detailed in Virginia Code § 58.1-1708 for each establishment from which such business is conducted.

Virginia Code § 58.1-1708 provides that the litter tax is imposed on manufacturers, wholesalers, distributors, and retailers of food for human or pet consumption; groceries; cigarettes and tobacco products; soft drinks and carbonated waters; beer and other malt beverages; wine; newspapers and magazines; paper products and household paper; glass containers and metal containers or plastic or fiber containers made of synthetic material; cleaning agents and toiletries; nondrug drugstore sundry products; distilled spirits; and motor vehicle parts. While flowers are not a specific product enumerated in the list of taxable items, florists may sell items such as glass, metal, or plastic vases or paper products that would be subject to litter tax.

A retailer of glass, metal, or plastic vases or containers and paper products would be subject to the litter tax. However, the tax does not apply to a manufacturer, wholesaler, distributor, or retailer that sells incidental items that are not generally held for use in providing its primary business purpose. See Public Document (P.D.) 16-216 (12/22/2016).

The Taxpayer’s website shows that its floral arrangements are sold in containers that are metal, glass, or possibly plastic. Further, a check of the Taxpayer’s business indicates that it does not sell glass, metal, or plastic vases or paper products apart from its floral arrangements. Based on these facts, the Taxpayer’s primary business purpose is the sale of flowers, and items included in such sales that would subject the florist to the litter tax were incidental to the flower arrangements. As such, the litter tax does not apply to the Taxpayer.

Refund Claim

Pursuant to the authority granted to the Department under Virginia Code § 58.1-1824, a protective claim for refund can be held pending the outcome of another case before the courts or the claim may be decided based upon its merits pursuant to Virginia Code § 58.1-1821. Because the Taxpayer’s application for correction includes a request for refund, the limitations provided under Virginia Code § 58.1-1824 will be applied.

Virginia Code § 58.1-1824 provides that “[a]ny person who has paid an assessment of taxes administered by the Department of Taxation may preserve his judicial remedies by filing a claim for refund with the Tax Commissioner. . . within three years of the date such tax was assessed.” Virginia Code § 58.1-1824, therefore, expressly limits the right to file a protective claim to cases in which both the filing of the claim and the payment of the assessment occurred within three years of the assessment. See P.D. 86-224 (11/3/1986). In addition, Title 23 of the Virginia Administrative Code (VAC) 10-20-190 A 1 requires all assessed taxes, penalties, and accrued interest for the year or years subject to the request to be paid in full before a taxpayer may file a protective claim.

The Taxpayer’s request for a refund was submitted on December 9, 2022. It filed its 2016 litter tax return and paid the tax in May 2017. As such, requests for refunds of litter tax paid for the 2016 tax year and all preceding tax years are outside the three-year limitations period and cannot be granted.

The Taxpayer filed its litter tax returns for the 2017 through 2020 tax years and remitted the tax and late filing penalties in January 2022. It filed its litter tax return and paid its litter tax for the 2021 tax year in August of 2022. The late filing penalty for the 2021 tax year was satisfied in December 2022. Because these payments occurred within the three-year limitations period in accordance with Virginia Code § 58.1-1824, the Taxpayer is eligible for refunds for these tax years.

Based on the analysis above, the Taxpayer was not liable for the litter tax and timely filed a refund request for the 2017 through 2021 tax years. Accordingly, refunds for the erroneously remitted litter tax and late filing penalties for the tax years indicated above will be issued along with statutory interest.

The Code of Virginia sections and regulation cited are available online at law.lis.virginia.gov. The public document cited is available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy and Legal Affairs, Adjudication and Resolution Division, at or **@tax.virginia.gov.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4415.B

Related Documents

86-224

16-216