Fiduciary Taxes, also called Trustee Taxes, are collected and remitted by a business on behalf of the individuals who actually pay the taxes. In essence, the business collecting the tax is serving as a trustee or agent holding the funds in trust until they are remitted to the taxing authority. Within the City of Virginia Beach, the local taxing authority consist of two departments: the Commissioner of Revenue (COR) whose responsibility is to create accounts, assess, and audit all registered businesses that are charged with collecting Trustee Taxes as well as answering all questions regarding these accounts; and the City Treasurer whose responsibility lies with the mailing, collecting, and posting of monthly and quarterly Trustee Tax Returns. In addition, the City Treasurer pursues any and all delinquent trustee taxes with every means available to us.
When a new business applies for a business license with the COR, an application is completed and the business is notified of its requirement to collect fiduciary taxes and hold them in trust until the end of the month/quarter when they are obligated to submit a return indicating their total receipts subject to taxation and of course the trustee tax monies. If any of the original application information changes or the business ceases operation and decides to close, the COR needs to be notified.
Tax Rates are set by City Council, vary by industry type, and are classified accordingly. Excluding Daily Rentals and Utility taxes which are due and payable on the 15th of April, July, October, and January all other trustee tax returns are due and payable on the 20th of each reporting month for monies collected in the preceding month.
In accordance with the Virginia Beach City Code (VBCC) §35-182
, an admission tax of 10% is applicable if an admission fee is charged for any amusement or entertainment, including charges for season tickets. This tax is charged on the amount paid for admission, exclusive of any state or federal tax. An admission tax is also imposed on participatory sports at the rate of 5%. Admission charges for observing participatory sports is levied at the rate of 10%.
For every pack of 20 cigarettes sold in Virginia Beach, a tax of $0.65 is applied and $0.81 is applied per pack of 25. The tax on cigarettes is a requirement in accordance with VBCC §35-207
. Packs of 20-25 cigarettes must be marked with a state and city cigarette tax stamp to be applied by the retail/wholesaler before offering the cigarettes for sale.
The city cigarette stamp may be applied for and purchased at the City Treasurer's office.
The state cigarette stamp may be applied for and purchased at the COR's office.
According to VBCC §35-252
, a person is engaged in the business of short term rental if they own the equipment and meet the following criteria:
1-The rental of consumer equipment cannot be less than 80% of the gross rental receipts of such rental business for a period of 92 days or less. The rate for this tax is 1% on the total amount charged for the rental. Examples: videos furniture, bikes, tents, signs, tuxedos, costumes. OR
2- The rental of non-consumer type heavy equipment cannot be less than 60% of the gross rental receipts of such rental business for a period of 270 days or less. The rate for this tax is 1.5% on the total amount charged for the rental. Heavy Equipment is defined as equipment without an operator that may be used in the construction, mining, forestry, manufacturing, telecommunication and broadcasting industries. Examples, to name a few: bulldozer, crane, lawnmower, scaffolding, woodworking machinery.
Gross proceeds refer to the total amount charged to each person for the use of daily rental property, excluding any state and local sales tax paid as required by the Virginia Retail Sales and Use Tax. Exclusions: Vehicles registered with the Department of Motor Vehicles, Game and Inland Fisheries and/or Aviation, rentals by the commonwealth, and political subdivisions of the Commonwealth or the United States. Additional exclusions for short term rental are heavy equipment and durable medical goods defined in 58.1-3503A
. Additional exclusions for heavy equipment include office furniture and/or equipment, and programmable computer equipment and peripherals. If operated when a service is provided the rental is excluded also.
When staying at any place of lodging, a flat rate of $1a night tax is charged in addition to 8% on the amount paid to stay there for that night and for each consecutive night thereafter. This requirement is in accordance to VBCC §35-159
. A 10.5% tax is applied for each night of lodging, excluding hotels, motels and travel campgrounds in the Sandbridge Special Service District. Lodging is defined as any room/rooms or space furnished to any transient. Transient means any person who, for any period not more than 90 consecutive days, either at his/her own expense or the expense of another, obtains lodging in any lodging place. Lodging place means any public or private hotel, inn, hostelry, tourist home or house, tourist camp, tourist cabin, camping grounds, motel, rooming house or any other place in the city offering lodging for payment to any transient.
Restaurant/Prepared Food & Beverage
Every time prepared food and beverages (including alcoholic beverages) are purchased, a 5.5% tax is charged on the amount paid for the items(s). This tax is required in accordance with the VBCC §35-137
and is also applicable to caterers and any other person/group that is paid to prepare food for individual(s) consumption. Food and beverages is defined as all food and/or beverages (including alcohol) purchased in or from a food establishment, whether prepared there or not, whether consumed there or not and regardless of the manner, time or place of service. Cater means to furnish food and/or beverages on the premises of another for compensation. Food establishment means any place in the city in or from which food and/or beverages are sold including, but not limited to, any restaurant, dining room, grill, coffee shop, cafeteria, café, snack bar, lunch counter, movie theater, delicatessen, confectionery, bakery, eating house, eatery, drugstore, ice cream or yogurt shop, lunch wagon or truck, pushcart or other mobile facility from which food is sold or any club, resort, bar, lounge or similar establishment-public or private.
According to the VBCC, a tax is applied to utility services including water, electric, and natural gas (§35-115
) and on telephones, mobile telephones and E-911 charges (§35-254
Utility Consumption Tax
During the 1999 and 2000 General Assembly sessions, legislation was passed deregulating the electric and gas industries. As a result, localities had to amend their utility tax ordinances to reflect these changes. Instead of a computing from a cost-of-service basis, utilities are now taxed on a consumption basis. A consumption tax is charged on the amount of energy consumed monthly, whether kilowatt hours for electricity (kWh) or per 100 cubic feet for gas (CCF). kWh means kilowatt hours delivered for 1000 watts of electricity delivered in a one-hour period by an electric provider to an actual consumer. However, in the case of a customer generator defined eligible (sometimes referred to as a co-generator) by the Virginia State Code §56-594
, it means kilowatt hours delivered from an electric grid to the customer's generator minus the kilowatt hours generated and fed back to the electric grid. CCF simply means a volume of gas at standard pressure and temperature in units of 100 cubic feet.