[Adopted 9-8-2010]
A.
GROSS PROCEEDS
SHORT-TERM RENTAL PROPERTY
Definitions. As used in this article, the following terms shall have
the meanings indicated:
The total amount charged to each person for the rental of
short-term rental property, excluding any state and local sales tax
paid under the provisions of Chapter 6 (§ 58.1-600 et seq.)
of Title 58.1 of the Code of Virginia.
All tangible personal property held for rental and owned by a person engaged in the short-term rental business as defined in Subsection B, excluding:
B.
There is hereby imposed the following tax:
(1)
In the amount of 1%, in addition to the tax levied pursuant to § 58.1-605 of the Code of Virginia, on the gross proceeds arising from rentals of any person engaged in any business as to which not less than 80% of the gross rental receipts of such business during the preceding year arose from transactions involving the rental of short-term rental property, other than heavy equipment property as defined in Subsection B(2), for periods of 92 consecutive days or less, including all extensions and renewals to the same person or a person affiliated with the lessee.
(2)
In the amount of 1 1/2%, in addition to the tax levied
pursuant to § 58.1-605 of the Code of Virginia, on the gross
proceeds arising from rentals of any person engaged in any business
as to which not less than 60% of the gross rental receipts of such
business during the preceding year arose from transactions involving
the rental of heavy equipment property for periods of 270 consecutive
days or less, including all extensions and renewals to the same person
or a person affiliated with the lessee. For the purposes of this subsection,
"heavy equipment property" means rental property of an industry that
is described under Code 532412 or 532490 of the 2002 North American
Industry Classification System as published by the United States Census
Bureau, excluding office furniture, office equipment, and programmable
computer equipment and peripherals as defined in § 58.1-3503A(16)
of the Code of Virginia.
C.
For purposes of determining whether a person is engaged in the short-term rental business as defined in Subsection B:
(1)
A person is "affiliated" with the lessee of rental property
if such person is an officer, director, partner, member, shareholder,
parent or subsidiary of the lessee, or if such person and the lessee
have any common ownership interest in excess of 5%;
(3)
Any rental of personal property which also involves the provision
of personal services for the operation of the personal property rented
shall not be treated as gross receipts from rental; provided, however,
that the delivery and installation of tangible personal property shall
not mean operation for the purposes of this subsection.
D.
Any person engaged in the short-term rental business, as defined
in this section, shall collect such tax from each lessee of rental
property at the time of rental and shall transmit a quarterly return,
not later than the 15th day following the end of each calendar quarter,
to the Commissioner of the Revenue, reporting the gross rental proceeds
derived from the short-term rental business. The Commissioner of the
Revenue shall assess the tax due, and the short-term rental business
shall pay the tax so assessed to the Treasurer not later than the
last day of the month following the end of the calendar quarter. Any
failure to file a quarterly return required by this section or to
pay short-term rental property tax when due shall be subject to the
provisions of § 58.1-3510.7 of the Code of Virginia. No
tax under this section shall be collected or assessed, however, on:
E.
Registration.
(1)
Every person engaging in the short-term rental business, as defined in this section, shall file annually with the Commissioner of the Revenue an application for a certificate of registration. The application shall be in a form prescribed by the Commissioner of the Revenue and shall set forth the name under which the applicant operates or intends to operate the rental business, the location of the business, the paragraph of Subsection B under which the business asserts that it is qualified for certification as a short-term rental business, and such other information as the Commissioner may require.
(2)
Each applicant shall sign the application as owner of the rental
business. If the rental business is owned by an association, partnership,
limited liability company, or corporation, the application shall be
signed by a member, partner, executive officer, or other person specifically
authorized by the association, partnership, limited liability company,
or corporation to sign.
(3)
Upon approval of the application by the Commissioner, a certificate
of registration shall be issued. The certificate shall be conspicuously
displayed at all times at the place of business for which it is issued.
(4)
The certificate is not assignable and shall be valid only for
the person in whose name it is issued and the place of business designated.
(5)
A person who has not previously been engaged in the short-term rental business who applies for a certificate of registration pursuant to this section shall be eligible for registration upon his certification that he anticipates meeting the requirements of a specific paragraph of Subsection B, designated by the applicant at the time of application, during the year for which registration is sought.
(6)
In the event that the Commissioner of the Revenue makes a written determination that a rental business previously certified as short-term rental business pursuant to this section has failed to meet either of the tests set forth in Subsection B during a preceding tax year, such business shall lose its certification as a short-term rental business and shall be subject to the business personal property tax with respect to all rental property for the tax year in which such certification is lost and any subsequent tax years until such time as the rental business obtains recertification pursuant to this section. In the event that a rental business loses its certification as a short-term rental business pursuant to this subsection, such business shall not be required to refund to customers daily rental property taxes previously collected in good faith and shall not be subject to assessment for business personal property taxes with respect to rental property for tax years preceding the year in which the certification is lost unless the Commissioner makes a written determination that the business obtained its certification by knowingly making materially false statements in its application, in which case the Commissioner may assess the taxpayer the amount of the difference between short-term rental property taxes remitted by such business during the period in which the taxpayer wrongfully held certification and the business personal property taxes that would have been due during such period but for the certification obtained by the making of the materially false statements. Any such assessment, and any determination not to certify or to decertify a rental business as a short-term rental business as defined in this subsection, may be appealed pursuant to the procedures and requirements set forth in § 58.1-3983.1 of the Code of Virginia for appeals of local business taxes, which shall apply mutatis mutandis to such assessments and certification decisions.
