The Virginia State Budget for FY 2023 and FY 2024, HB 30 (enacted June 22, 2022), extends sunset dates for four sales tax exemption programs to July 1, 2023, otherwise set to expire July 1, 2022.
Drilling Equipment
The exemption for certain drilling equipment will now remain in effect through July 1, 2023. The drilling equipment exemption applies to raw materials, fuel, power, energy, supplies, and machinery (including repair and replacement parts) used directly in exempt production activities. These items are exempt from sales and use tax if 50% or more of the item’s use is directly in the drilling, extraction, refining, or processing of natural gas or oil, or in the reclamation of a well area.
The sunset date for various sales tax holidays is extended through July 1, 2023. During the three-day period beginning on Friday, August 5, 2022 at 12:01 a.m. and ending on Sunday, August 7, 2022 at 11:59 p.m., sales of energy-saving equipment, certain school supplies, and hurricane preparedness equipment are eligible for a sales tax exemption.
Energy-Saving Equipment
Energy-saving products must be designated as Energy Star or WaterSense products with a sales price of $2,500 or less per item and must be purchased for noncommercial home or personal use. Qualified Energy Star products are Energy Star certified dishwashers, clothes washers, air conditioners, ceiling fans, light bulbs, dehumidifiers, programmable thermostats, or refrigerators.
Certain School Supplies, Clothing, and Footwear
School supplies include, but are not limited to, dictionaries, notebooks, pens, pencils, and notebook paper. The exemption applies to each school-supply item with a selling price of $20 or less after any discounts or price reductions. Clothing or footwear items, each with a selling price of $100 or less after any discounts or price reductions, also qualify for exemption.
Hurricane Preparedness Equipment
Exempt items include portable generators with a selling price of $1,000 or less per item and gas-powered chainsaws with a selling price of $350 or less per item. Hurricane preparedness equipment, such as specified radios, batteries, and lights with a selling price of $60 or less per item, is also exempt. Selling price is determined after consideration of discounts or price reductions.
For any questions or for assistance in determining how these sales tax exemptions and holidays apply to your business, contact one of the Ryan experts listed below.
TECHNICAL INFORMATION CONTACTS:
Brian Stromen
Principal
Ryan
763.445.4200
brian.stromen@ryan.com
Christopher Potter
Director
Ryan
781.359.3800
christopher.potter@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.