23VAC10-70 Virginia Slaughter Hog and Feeder Pig Excise Tax Regulations

REGULATIONS

Vol. 25 Iss. 12 - February 16, 2009

TITLE 23. TAXATION

DEPARTMENT OF TAXATION

Chapter 70

Proposed Regulation

Title of Regulation: 23VAC10-70. Virginia Slaughter Hog and Feeder Pig Excise Tax Regulations (repealing 23VAC10-70-10 through 23VAC10-70-70).

Statutory Authority: § 58.1-203 of the Code of Virginia.

Public Hearing Information:

March 25, 2009 - 10 a.m. - 2200 West Broad Street, Multipurpose Room, Rear Entrance, Richmond, VA

Public Comments: Public comments may be submitted until 5 p.m. on April 17, 2009.

Agency Contact: Jospeh Mayer, Lead Tax Policy Analyst, Department of Taxation, 600 East Main Street, Richmond, VA 23219, telephone [phone], FAX [phone], or email [e-mail].

Basis: Section 58.1-203 of the Code of Virginia provides that the "Tax Commissioner shall have the power to issue regulations relating to the interpretation and enforcement of the laws of this Commonwealth governing taxes administered by the Department." The authority for the current regulatory action is discretionary.

Purpose: As the result of a comprehensive review of all of its regulations, TAX has identified numerous regulations that have been made obsolete by changes in state and federal law. As these regulations are obsolete, they are being repealed. As these regulations are obsolete, their repeal will have no effect on the health, safety and welfare of citizens. Repeal of these regulations does not reflect a change in existing departmental policy.

Effective November 1, 1986, federal law ("The Pork, Promotion, Research, and Consumer Information Act of 1985", 7 USC § 4801) ceded to the federal government the sole right to levy an excise tax on pork. As a result, the Virginia Slaughter Hog and Feeder Pig Excise Tax imposed by § 3.1-763.9 of the Code of Virginia is no longer imposed. This regulatory action will repeal the Virginia Slaughter Hog and Feeder Pig Excise Tax Regulation.

Substance: This regulatory action will repeal the Virginia Slaughter Hog and Feeder Pig Excise Tax Regulation. Currently, the regulation sections repeat the statute and in the case of 23VAC10-70-40, the section is inconsistent with the statute. 23VAC10-70-40 imposes a three-year recordkeeping requirement, where as the statute only requires two years.

Issues: This regulatory action will ease voluntary taxpayer compliance and TAX’s administration of the state tax laws by eliminating an obsolete regulation. As this regulation is obsolete the repeal will result in no disadvantages to the public or the Commonwealth.

The Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Department of Taxation (Department) proposes to repeal these regulations.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Effective November 1, 1986, the federal "Pork, Promotion, Research, and Consumer Information Act of 1985," 7 USC § 4801 (Federal Pork Act), ceded to the federal government the sole right to levy an excise tax on pork. As a result, the Virginia Slaughter Hog and Feeder Pig Excise Tax provided for by Code of Virginia § 3.1-763.9 has not been imposed since that date.

Some citizens have expressed concern that if the Federal Pork Act is overturned, the Virginia pork industry would no longer be able to continue with its tax-funded programs. Since Code of Virginia § 3.1-763.9 has not been repealed, the Virginia Slaughter Hog and Feeder Pig Excise Tax would become effective again if the Federal Pork Act were to be overturned.

The Virginia Slaughter Hog and Feeder Pig Excise Tax Regulations are essentially duplicative of Code of Virginia § 3.1-763.6, § 3.1-763.9, 3.1-763.10, § 3.1-763.11, and § 3.1-763.12, with one exception; the Regulations require that records be preserved for at least three years, while Code of Virginia section § 3.1-763.9 requires that records be kept for a period not less than two years. When the Code of Virginia and the Virginia Administrative Code are in conflict, the Code of Virginia applies. Thus, if as proposed by the Department these regulations are repealed, the effective law in Virginia would not change. Consequently, the proposed repeal of these regulations would have no impact, other than perhaps to prevent confusion for those who find and read the regulations.

Businesses and Entities Affected. The proposed repeal of these regulations will not significantly affect businesses and entities.

Localities Particularly Affected. No localities are particularly affected.

Projected Impact on Employment. The proposed repeal of these regulations will not affect employment.

Effects on the Use and Value of Private Property. The proposed repeal of these regulations will not affect the use and value of private property.

Small Businesses: Costs and Other Effects. The proposed repeal of these regulations will not affect small businesses.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed repeal of these regulations will not affect small businesses.

Real Estate Development Costs. The proposed repeal of these regulations will not affect real estate development costs.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 36 (06). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB’s best estimate of these economic impacts.

Agency's Response to the Department of Planning and Budget's Economic Impact Analysis: The agency agrees with the Department of Planning and Budget’s economic impact analysis.

Summary:

Effective November 1, 1986, federal law ("The Pork, Promotion, Research, and Consumer Information Act of 1985", 7 USC § 4801) ceded to the federal government the sole right to levy an excise tax on pork. As a result, the Virginia Slaughter Hog and Feeder Pig Excise Tax provided for by § 3.2-2006 of the Code of Virginia is no longer imposed. This regulatory action will repeal the Virginia Slaughter Hog and Feeder Pig Excise Tax Regulation.

VA.R. Doc. No. R07-36; Filed January 26, 2009, 1:23 p.m.