Spring 2015
VRF Update: New Legislation Will Impact Virginia Retailers Three pieces of legislation which will heavily impact Virginia Retailers have surfaced on the State and Federal levels. These include the adjusted Accelerated Sales Tax (AST), the upcoming EMV Credit Card requirements and the updated Virginia Sales Tax Holidays.
be required to pay AST. This means that a business with $2.5 million in annual sales tax must pay 90% of their anticipated monthly sales tax for June before those taxes have been fully collected. Under current procedure, collected sales taxes are due the next month. Even though the state budget goes into effect July 1, The Accelerated Sales Tax 2015, the law requires retailers to The Virginia Retail Federation (VRF) estimate taxes and submit in June was challenged to convince the of 2015. The accelerated payment Virginia General Assembly of the requirement applies only to the negative impact the Governor’s budget month of June. However, this means proposal pertaining to the “Accelerated that many retailers will have to pay Sales Tax” (AST) would have on double taxes in June 2015: both the retailers. AST requires businesses actual taxes due for May sales and the to pay one month’s sales taxes early estimated taxes due for June sales. If and currently applies to businesses a retailer overpays the estimated June with $26 million in annual sales. taxes, the overpayment will result in a credit against their July payment Effective July 1, 2015, the newly (due in August). If they underpay, adopted State budget lowered the they will owe the difference in July. AST threshold to businesses with $2.5 million in annual sales. This will EMV Credit Cards dramatically impact over 4,000 Protecting consumers’ sensitive additional small retailers who will now information is a priority for retailers and consumers alike. To help with this protection, Federal regulations In This Issue... are being developed to incorporate 1 VRF Legislative Update the mandatory use of “Europay, MasterCard and Visa” (EMV) 2 Letter to Members cards starting October, 2015. These cards have an embedded VRF Legislative Update Cont. microprocessor chip that encrypts, 3 New Event Series: Key Sessions protects and stores cardholder data. Chip cards are more difficult to 4 The RMA Scene duplicate due to their authentication capabilities - making fraud and 6 TSBL Advertising with the Flying Squirrels card duplication more difficult. 7 TSBL’s Love Local Campaign 8 Welcome New Members 10 Retailers 4Life 11 Calendar of Events
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While EMV cards are widely used in Europe, the United States credit card industry has been slower to require this technology. As proposed, the new U.S. credit cards could be used with either EMV or signature processing systems; however, retailers who do
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not have EMV card readers will be at great liability. Here’s why: currently, if you run a fraudulent card, banks absorb the costs. Starting in October 2015, if someone pays with a fraudulent chip card, and you’re not set up with an EMV card reader, the banks will no longer be liable. For example, a fraudster buys $30 worth of socks from a shoe store with a counterfeit EMV chip card. If the store doesn’t have a chip card reader to process the transaction, the store could be on the hook for the $30. In order to be in compliance when the regulation becomes effective in October 2015, we encourage you to communicate with your current merchant services provider as soon as possible. They will be able to provide you with the most current details about how the new systems work, along with what equipment you will need to upgrade your credit card processing systems. Getting an EMV-enabled device is a good thing to start considering. The sooner Continues on page 2