Virginia has introduced a new policy allowing a one-time safe harbor for contractors who have omitted or inaccurately remitted retail sales and use taxes. Starting from July 1, 2024, the Department of Taxation can use a contractor’s erroneously collected retail sales tax payments to offset a use tax assessment related to the transaction.

How To Qualify

To qualify for this safe harbor, the contractor must demonstrate that the property for which sales tax was incorrectly collected and remitted is the same property used in realty and is subject to a use tax assessment.

Next Steps

After receiving this relief, the contractor must either pay sales tax to its vendors or remit the use tax directly to the Department for its purchases of tangible personal property used in its real property contracts. This relief is a one-time opportunity designed to help contractors in response to industry confusion. This new policy is aimed at providing a temporary reprieve for contractors who may have inadvertently erred in their tax remittances, offering them a chance to rectify the situation and ensure compliance with tax regulations moving forward.

For more information, reach out to Thompson Tax today. We are your Trusted Tax Advisors.

“The liberal justices of the California Supreme Court sided with California’s corrupt politicians to strip citizens of the initiative rights that they have had for over 112 years.” – Carl DeMaio
The California Supreme Court sided with Gavin Newsom and California Democrat politicians in removing the California Taxpayer Protection Initiative from the November ballot.

The California Taxpayer Protection Initiative (CTPI) is a citizens initiative that collected the required amount of valid signatures — over 1.4 million — from Californians to be placed on the ballot. The measure would make it harder for state and local politicians to impose costly and unfair tax hikes — the reason that politicians sued to block it from the ballot.

Specificialy, the California Taxpayer Protection Initiative would:

-Restore a two-thirds vote for any tax hike – thus ending the way they imposed the car and gas takes hikes recently
-Impose a stricter definition on what is a “tax” so politicians can’t call them “fees”
-Require the words “tax increase” be included on the official title of any measure that appears on the ballot that contains a tax hike inside of it, and
-Repeal dozens of tax hikes imposed after Jan 1, 2022 – immediately saving taxpayers money Carl DeMaio, a candidate for State Assembly and chairman of the tax-fighting group Reform California — which helped collect signatures to place the initiative on the ballot, says that the decision stripped citizens initiative rights.

“The liberal justices of the California Supreme Court sided with California’s corrupt politicians to strip citizens of the initiative rights that they have had for over 112 years,” said Demaio. “By removing the California Taxpayer Protection Initiative from the November ballot, the Sacramento Swamp has shown how far they will go in their abuse of power to silence their opposition and prevent reform from happening.”
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SECURE Act 2,0 with over 60 provisions mostly all related to retirement plans, was enacted December 29, 2022 as part of the Consolidated Appropriations Act, 2023 (P.L. 117-238). I maintain a table of the provisions, summary from the Senate Finance Committee of each provision, effective date, and any guidance from the IRS.

SEC. 115 of the SECURE Act is called “Withdrawals for Certain Emergency Expenses.” It is well-intended to allow individuals to withdraw up to $1,000 from their eligible retirement account every three years without the 10% additional tax of IRC §72(t), if the funds are for distributions used for certain emergency expenses, to meet “unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses.” SEC. 115 is on pages 838-839 of P.L. 117-238.

IRC §72(t)(2)(I) covering this additional tax exception is 504 words long and in addition to defining emergency expenses, also provides:

The individual may only make one distribution per year, and it may not exceed the lesser of $1,000 or “an amount equal to the excess of “(I) the individual’s total nonforfeitable accrued benefit under the plan (the individual’s total interest in the plan in the case of an individual retirement plan), determined as of the date of each such distribution, over ‘‘(II) $1,000.”
The plan administrator may rely on employee’s written certification that the exception is met.
The IRS can issue regulations where the employee statement doesn’t apply if the administrator “has actual knowledge” contrary to the certification, and procedures to address cases of employee misrepresentation.
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