New Guidance Issued by Virginia Regarding Sales and Use Tax Refunds

Effective July 1, 2013, House Bill 2313 (Acts of Assembly 2013, Chapter 766) increases the rate of the statewide Retail Sales and Use Tax and imposes an additional state Retail Sales and Use Tax in the Northern Virginia and Hampton Roads Regions. Just recently the Virginia Department of Taxation issued its guidelines respecting associated refunds.  The guidance is available at the Tax Department's website at the following weblink (last accessed 5.30/2013):

http://townhall.virginia.gov/L/ViewGDoc.cfm?gdid=5249&CFID=4011974&CFTOKEN=85dbd2726aa0275e-C4E95690-01B5-24BD-AB402B0E60D22F4D

My law partner Pat Genzler offers the following summary of and thoughts regarding the new guidelines:

• The increase statewide is .3 % (from 4% to 4.3%), but in Northern Virginia and Hampton Roads is an additional .7 %.  Adding the new additional 1% local tax increase, the total tax for Northern Virginia and Hampton Roads will now be 6% (4.3% state, plus .7% regional, and plus 1% local).
• Available refunds relate to "bona fide real estate construction contracts" entered into before April 3, 2013 that have: a) a specified completion date; and b) finished plans and specifications at award. 
• If the project qualifies, a refund is available through the end of the contract.  Changes to either the completion date or adding new work are not available for the credit.
• The finished plans and specifications at award likely excludes many design-build contracts since the plans and specifications for those projects are not typically "finished" at the time of award; but interpretation remains to be seen.
• There is an unaddressed difference between the Guideline's language and that of the statute - specifically the statute only requires plans and specifications and does not use the word "finished" that is being applied as a qualifier by the Guidelines.  Whether this was intentional or not, such as being specifically intended to exclude design-build contracts, is unclear.

Tax issues are generally complicated at best, and these Guidelines, while intended as clarification, are seemingly wanting in terms of that intended goal.  Perhaps (hopefully) the Department of Taxation will choose to clarify further some of these issues.

Virginia FOIA: US Supreme Court Holds VA FOIA Can Limit Access to VA Residents

The U.S. Supreme Court ruled on April 29, 2013 in McBurney v. Young that Virginia's Freedom of Information Act can limit records access to residents of Virginia.  This was a unamimous opinion written by Justice Alito.  Among other things, the high court held that Virginia's FOIA law provides a service to local citizens that would not otherwise be available at all, and therefore does not consitutionally need to extend to non-residents. 

Administrative Decision Review Change About to Go Into Effect

Last session the Virginia General Assembly amended Virginia Code Sec. 2.2-4027 addressing judicial review of administrative decision.  Those changes go into effect on July 1, 2013.  The two key changes are: 1) removal of the prior "reasonable basis" standard, and changing it to determination whether there was substantial evidence in the agency record to support the agency's decision; and 2) adding de novo (fresh) review of issues of law.  Further, the amendment provides for a court to augment the agency record in whole or in part upon motion of any party.  Whether this will substantively affect judicial review is a matter of debate among practitioners.  However, it would seem, at the least, to provide greater opportunity for courts to challenge agency decisions and, if nothing else, not feel required to give as great deference to the findings of agencies.

The weblink to the Virginia Legislative website for the new law follows (last accessed 5/7/13):
http://lis.virginia.gov/cgi-bin/legp604.exe?ses=131&typ=bil&val=sb944&submit=GO