To compute the dealer's discount, a dealer (other than a vending machine dealer) would multiply the 4.3% state tax listed on his return by:
Any dealer whose average monthly sales tax liability exceeds $20,000 is not eligible for the discount. No dealer discount is allowed on the 0.7% regional tax imposed in the Hampton Roads and Northern Virginia Regions. For definitions of the "Hampton Roads Region" and the "Northern Virginia Region" see 23VAC10-210-2070.
Examples:
Dealer A who makes taxable sales of $10,000 during the month would report state and local tax of $530 ($430 state tax and $100 local tax), from which he would retain a dealer's discount of $4.80, provided that his return is timely filed and the state and local tax is timely paid. The $4.80 discount is computed by multiplying the 4.3% state tax ($430) by 0.01116 since the dealer's monthly taxable sales volume is less than $62,501.
Dealer B who makes taxable sales of $250,000 during the month would report state and local tax of $13,250 ($10,750 state tax and $2,500 local tax), from which he would retain a dealer's discount of $55.99 provided that his return is timely filed and the state and local tax is timely paid. The $55.99 discount is computed by multiplying the 4.3% state tax ($10,750) by 0.00558 since the dealer's monthly taxable sales volume is greater than $208,001.
Examples:
Vending machine dealer A with $15,000 in wholesale purchases for resale during the month would report state and local tax of $945 ($795 state tax and $150 local tax), from which he would retain a dealer's discount of $9.60, provided that his return is timely filed and the state and local tax is timely paid. The $9.60 discount is computed by multiplying the 5.3% state tax ($795) by 0.01208 since the dealer's monthly taxable sales volume is less than $62,501.
Vending machine dealer B with $200,000 in wholesale purchases for resale during the month would report state and local tax of $12,600 ($10,600 state tax and $2,000 local tax), from which he would retain a dealer's discount of $96.04, provided that his return is timely filed and the state and local tax is timely paid. The $96.04 discount is computed by multiplying the 5.3% state tax ($10,000) by 0.00906 since the dealer's monthly taxable sales volume is at least $62,501 but is less than $208,001.
Example:
Dealer C holds separate certificates of registration for five business locations. Each location has monthly taxable sales of less than $62,501, but total taxable sales for all five locations are $300,000 for the month. Because total taxable sales exceed $208,001, the dealer's discount is computed using the 0.00558 discount rate.
Dealers with multistate business locations must compute the discount based upon taxable sales from all business locations in Virginia and on Virginia taxable sales from out-of-state business locations.
Example:
Dealer A, with business locations in Virginia, also has business locations in other states, all of which are registered for collection and remittance of the tax. The out-of-state business locations sell goods to Virginia customers located in Virginia. The total monthly taxable sales for all Dealer A's Virginia business locations are $200,000, and the total Virginia taxable sales from Dealer A's out-of-state business locations are $100,000. Because total taxable sales exceed $208,001, the dealer's discount is computed using the 0.00558 discount rate.
The department will perform a reconciliation, on an annual basis or more frequently, of dealers holding multiple certificates of registration in order to ensure that the dealer's discount is computed properly by those dealers.
Example:
Dealer D has quarterly taxable sales of $100,000. His average monthly taxable sales for the quarter ($100,000 ÷ 3) are $33,333.33. Because his average monthly taxable sales are less than $62,501, Dealer D would compute the dealer's discount using the 0.01116 rate.
For extensions, see 23VAC10-210-550; for penalties and interest, see 23VAC10-210-2030 through 23VAC10-210-2032.
23 Va. Admin. Code § 10-210-485
Statutory Authority: § 58.1-203 of the Code of Virginia.