A new 1% retail sales and use tax comes into effect in the county on Wednesday.

It raises the tax rate in Halifax County to 6.3 %. This includes the 4.3% state tax, the 1% local option tax and the 1% Halifax additional tax.

The increased sales and use tax increase does not apply to food purchased for human consumption, such as groceries, or essential personal hygiene products as both are taxed at a reduced rate. 

An overwhelming majority of Halifax County voters said a resounding “yes” to the fate of the 1% sales tax increase when they went to the polls in November.

The county board of supervisors placed the levy on the ballot — the first of its kind in Virginia — after Del. James Edmunds succeeded in changing state law to allow the historic referendum earlier this year.

The proposed sales tax hike is projected to raise about $3.3 million annually, or $100 million over 30 years, with revenues to be used exclusively for the construction or renovation of schools.

Voters agreed the sales tax would be capped at a maximum of 1% and will expire no later than 2051 with revenues to be used only for the construction or renovation of schools. 

The Virginia Department of Taxation has laid out the ins and outs of the additional sales and use tax.

Sales made on or after July 1 will be subject to the new tax rate, and items delivered to a purchaser and paid for on or after July 1 will be taxed at the 6.3 % rate, regardless of when the product was ordered, according to the Virginia Department of Taxation.

The taxation department says the increased rate will not apply to property delivered prior to July 1, but paid for on or after July 1.

Also, the increased rate will not apply when a taxable sale or lease payment is paid for in full prior to July 1, even though delivery may occur after July 1, according to the department of taxation.

Food purchased for home consumption is not affected by this law change and will remain at 2.5 %.

In January, the retail sales and use tax on qualifying essential personal hygiene products was reduced to 2.5%, and this additional Halifax County tax will not apply to these products.

According to the Virginia Department of Taxation, “the local option sales tax is generally sourced to the city or county of the place of business of the dealer collecting the tax. In-state dealers should collect the Halifax additional tax on sales made in places of business located within Halifax County, even if the goods are delivered outside of Halifax County.”

Other state and local tax laws going into effect Wednesday include the following:

• Cigarette and tobacco products tax increase: Beginning Wednesday, the tax rate doubles for cigarettes and other tobacco products currently subject to the tax. The tax on a pack of cigarettes increases from 30 cents to 60 cents per pack. 

• Liquid nicotine subject to tobacco products tax: The new tax rate for liquid nicotine products is 6.6 cents per milliliter on sales or purchases on or after July 1.

• Retail sales and use tax exemption for gun safes: As of July 1, gun safes with a selling price of $1,500 or less per item are exempt from the retail sales and use tax. 

This exemption includes a gun safe or vault that is commercially available; secured with a digital or dial combination locking mechanism or biometric locking mechanism; and designed for the storage of a firearm or for ammunition.

Glass-faced cabinets are not eligible for this exemption. 

For a complete list of the new 2020 state and local tax laws, view the Virginia Tax 2020 Legislative Summary.