4 A Henrico resident with a “Richmond, Virginia” mailing address buys a computer on the internet from an out-of-state company. That company collects the sales tax and sends the tax to the State Department of Taxation and labels the sale as having occurred in “Richmond, Virginia.” Consequently, the wrong locality receives this money.
6 CATALOG SALES A Henrico County resident purchases some sporting goods from a catalog company with an out-of-state headquarters. The county resident’s address is “Richmond, Virginia.” After the sale, the out-of-state catalog company sends the sales tax that it has collected to the State Department of Taxation. The sale is depicted as having occurred in “Richmond, Virginia.” The wrong locality receives this money.
Sales Tax of Large Retailers Paid by Out-of-State Businesses
8 SALES TAX OF LARGE RETAILERS PAID BY OUT-OF- STATE BUSINESSES A national department store chain has multiple “Richmond, Virginia” locations within the central Virginia area. Some are in the county and some are in the city. The retailer collects the sales taxes paid by county residents and remits one payment for all of these locations to the State Department of Taxation on a monthly basis. The retailer notes that the sales occurred in “Richmond, Virginia.”
11 CERTAIN VEHICLE LEASES A county resident with a “Richmond, Virginia” address goes to a local car dealership to lease a vehicle. In this particular lease, the leasing company — located out-of-state — is responsible for filing the personal property tax return with the correct locality. That company files with the city due to the “Richmond, Virginia” mailing address, even though the person who leased the vehicle lives within the county. In this case, the county does not receive the revenue it is due and the leasing company pays a higher tax (due to tax rate differences).
Companies Leasing Business Equipment Such As Copiers
13 COMPANIES LEASING BUSINESS EQUIPMENT SUCH AS COPIERS A manufacturer leases a copier to a Henrico company with a “Richmond, Virginia” mailing address. The manufacturer is responsible for reporting the business personal property for tax purposes. The manufacturer reports this equipment incorrectly to the city for personal property taxes. This results in both the company paying more in taxes due to the city’s higher tax rate and the county losing this revenue.
18 Why Support the Address Change? Matter of Fairness : –Henrico citizens should benefit from Henrico taxpayer dollars. –Henrico citizens should not pay for the services they do not receive. –It is estimated that $5 million in revenue annually supports City services because of the address confusion. –There are a number of initiatives that $5 million would fund.
19 Check ‘Yes’ for “Henrico, VA” $5.0 Million Would Accomplish One of the Following: –Hire 100 new teachers. –Operate 2 new elementary schools or 1 new middle school. –Purchase 54 new school buses. –Hire 90 new police officers. –Purchase 150 marked police cars –Purchase and fully staff 4 new EMS units –Equip and fully staff a new fire station –Develop 2 new community parks. –Double the annual budget for library materials. –Could nearly double the budget for County’s Real Estate Tax Advantage Program (current budget = $6 million)
20 Check ‘Yes’ for “Henrico, VA” Tax/Fee Henrico’s Tax Rate Richmond’s Tax Rate Personal Property$3.50/$100$3.70/$100 Machinery & Tools$1.00/$100$2.30/$100 Motor Vehicle License < 4,000 lbs.$20$23 Electric Consumer Utility, Residential$1 cap$4 cap Gas Consumer Utility, ResidentialNo Tax$4 cap In addition, Henrico citizens may be paying more than they have to:
Check ‘Yes’ for “Henrico, VA” Presentation to Henrico County Residents and Civic Groups April, 2008