Virginia Announces Process for Refunding Illegal NVTA Taxes

April 14, 2008

Following February’s Virginia Supreme Court ruling invalidating seven taxes collected by the Northern Virginia Transportation Authority, Governor Tim Kaine has signed a bill setting up a refund process for those who paid the illegal taxes. The refund process will be different for each type of tax:

Grantors Tax on Home Sales = .40 cents/$100 value
Settlement agents will send refund checks to taxpayers. Contact your settlement agent, who will receive the money from the NVTA.

Regional Registration “Fee” = $10 annually
Initial Vehicle Registration “Fee” = 1% of value

These two taxes (unlike fees, the money collected would be used for purposes unrelated to providing a service) will be refunded by the DMV directly to the taxpayer, using the most recent address on file.

Any of the above taxes not claimed or returned by September 30, 2008 will become “unclaimed property” and follow the refund process below.

Motor Vehicle Rental Tax = 2% of rental rate
Transient Occupancy Tax = 2% of hotel rate
Safety Inspection “Fee” = $10 annually
Sales Tax on Auto Repairs = 5% of labor charges

It’s more complicated for these four taxes. The state’s website on the refunds is here, with the money being sent to the “unclaimed property” division. The state has promised to begin the refund process in early May, and it will likely involve some manner of filling out claim forms and submitting receipts. We will post an update when the state provides more information.

The NVTA had collected $13 million when its power to impose taxes was ruled unconstitutional. More on the Marshall v. NVTA case is here.

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