Effective Oct.1, 2020, a new 0.7% regional retail sales and use tax will be levied in localities in Central Virginia. This includes the city of Richmond and the counties of Charles City, Chesterfield, Goochland, Hanover (including the town of Ashland), Henrico, New Kent and Powhatan. The sales and use tax levied in these localities will total 6%, comprised of the 4.3% state tax, the 0.7% regional state tax and the 1% percent local option tax.

Sales made on or after Oct.1, 2020, will be subject to the new tax rate. Items delivered to a purchaser and paid for on or after Oct. 1, 2020, will be taxed at the 6% rate, regardless of when the property was ordered. The increased rate will not apply to property delivered prior to Oct. 1, 2020, but paid for on or after Oct.1, 2020. Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to Oct.1, 2020, even though delivery may occur on or after Oct.1, 2020, or the paid-in-full lease payment covers a lease period beginning on or after Oct.1, 2020.

More information can be found in Tax Bulletin 20-8 and in the Laws, Rules, and Decisions section of the Virginia Department of Taxation website.

If you have any questions about this alert, contact a Mitchell Wiggins team member today: Richmond 804-282-6000 |  Tri-Cities 804-733-5566.