Beginning in August, about 90,000 Virginia retailers will no longer be able to pay sales tax by mail as the state begins to mandate electronic sales tax reporting. The change could cause problems for some businesses, said Laurie Aldrich, president of the Virginia Retail Merchants Association.
“If you don’t have Internet capabilities, you can’t very well file online,” Aldrich said.
Aldrich estimated that about half of the 90,000 businesses that will be required to pay their July 2012 sales tax online currently submit payments by mail.
The change will affect all Virginia businesses that pay less than $20,000 in sales taxes per month. Bigger retailers are already required to pay their taxes online, but they can still file their returns by paper. Under the new law, they will be required to file electronic returns as well.
The vast majority of the affected businesses must file and pay sales tax monthly, Aldrich said, with the first payment due Aug. 20. Retailers who collect less than $100 in sales tax monthly are only required to file sales tax returns quarterly and will have to pay online beginning next summer.
The move to electronic payment was mandated as a part of the 2012-14 state budget passed in April. The change, Aldrich said, was buried in the $85 billion budget.
“It was something that was missed by everyone,” Aldrich said. “All the lobbying groups missed it, the appropriations staff missed it, the legislators missed it. … We only just became aware of it literally a couple of weeks ago.”
The VRMA has posted a how-to guide for online tax submission on its website. Businesses that cannot make the transition to electronic filing by next month’s deadline can apply for a temporary waiver by submitting a request in writing to the Virginia Department of Taxation.
Ginny Slaughter, spokeswoman for the Virginia Department of Taxation, said in an email that the waivers would be available for an indefinite period to business that is unable to pay online. Initially, the taxation department will not impose any penalty for filing returns by mail, Slaughter wrote.