REBATES: Virgina: No Tax on Energy Efficient Products

Following the path of our friends in Georgia, all of those living in Virgina will be free of taxes on energy efficient appliances this weekend.  At GetWithGreen.com we are wondering when the other States are going to join the trend!   Here is the Associated Press Story…

Va.: No Tax on Energy Efficient Products
Thursday October 4, 3:54 pm ET
By Dena Potter, Associated Press Writer 
Virginia: Energy Star Tax Holiday Narrow in Scope to Curb Impact on Revenue

RICHMOND, Va. (AP) — State officials hope this weekend’s inaugural sales-tax holiday on certain energy-efficient products will help the environment while saving Virginians money — just not too much money.
 
Shoppers both in stores and online won’t have to pay the 5 percent sales tax from Friday through Monday on certain items priced up to $2,500 that bear the Energy Star logo, which means they meet federal energy efficiency guidelines.

The tax holiday applies to new and used refrigerators, washing machines, air conditioners, ceiling fans, dishwashers, dehumidifiers, compact fluorescent light bulbs and programmable thermostats.

Other big-ticket items such as freezers, dryers, furnaces, heat pumps and windows are excluded, as are energy-efficient electronics such as computers, televisions and battery-charging systems.

“We kind of looked at what we could offer to help people make good energy decisions without breaking the budget as well, and we had to have a cutoff someplace,” said Del. John A. Cosgrove, R-Chesapeake, who sponsored the legislation that created the holiday.

The state expects consumers to spend more than $3 million on tax-exempt items during the four-day tax holiday. Based on those figures, the Department of Taxation projects it will cost state and local governments at least $166,000 in lost tax revenue this year, increasing to $215,000 by 2011.

Virginia faces an estimated $641 million shortfall in the current budget, and Gov. Timothy M. Kaine last week announced layoffs and plans to use money from the state’s rainy-day fund to get finances under control.

“The challenge is that we lose revenue, and when times are tight you have to really make smart choices about what revenue you’re willing to give up,” said Del. David Englin, D-Alexandria.

Englin sponsored legislation this year that would have done away with the sales tax on all Energy Star appliances. The tax department estimated it would have cost the state “substantial” revenue, and lawmakers, including Englin, voted instead for the more limited version.

Englin called the tax holiday a “terrific first step” and vowed to push for its expansion. Cosgrove said he, too, would like to see it broadened when the state’s finances improve.

The exemption is limited to personal — not commercial — purchases in another effort to limit its impact on revenues.

The tax department directed retailers to look for red flags — someone buying 20 refrigerators or paying with a company credit card or check.

“We’re just depending on the good-faith effort of our retailers to manage that,” tax department spokesman Joel Davison said, without elaborating on possible punishment for retailers who knowingly sell to commercial buyers.

Like Virginia’s sales-tax holidays for school supplies and hurricane preparedness items, retailers are allowed to sell other items tax-free but still must pay the 5 percent sales tax to the state.

While the items included in Virginia’s sales-tax holiday are limited, any attempt to promote energy conservation is important, said Cosgrove, who also serves as chairman of the Chesapeake Bay Commission.

Most Energy Star appliances use around 30 percent less energy, while compact fluorescent light bulbs save at least 80 percent, according to the Virginia Department of Mines, Minerals and Energy.

“Anywhere we can cut back and make it attractive to the consumer and make it attractive for business, I think then everybody takes a little ownership and then we all work together to try to make it a better place to live,” he said.

Virginia joins Florida, Georgia and Connecticut, who also offer reprieves for Energy Star products. Cosgrove acknowledged it may take a couple years for the holiday to catch on here.

“A lot of times somebody has an old washer, an old dryer and the transmission’s going or whatever and they’re just waiting for that one excuse to go out and replace it,” Cosgrove said, adding that the savings on a $1,000 purchase would be $50.

“That can make or break a decision on whether to replace that item.”
 

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