Form Ct-2 - Guidelines And Rules For The Virginia Communications Taxes (Page 16 of 16) in pdf

Example 1:

Example 2:

Total state communications taxes collected for the

Same facts, except that the accrued cable franchise

month are $40,000,000. TAX has administrative

payment was $400,000.

costs of $100,000. VDDHH has costs of $1,000,000.

Total state communications

The APA has determined that Locality X’s share of

taxes revenues:

$40,000,000

the net communications taxes revenue is 1 percent

Less (1) TAX costs:

$100,000

(.01). The cable provider for Locality X reports an

(2) VDDHH costs: $1,000,000 <$1,100,000>

accrued monthly cable television franchise fee of

$350,000. Locality X’s distribution for the month

Net revenues available for

would be determined as follows:

distribution to localities:

$38,900,000

Total state communications

Locality X would be entitled to a cable franchise

taxes revenues:

$40,000,000

fee distribution of $400,000.

Less: 1. TAX costs:

$100,000

Locality X’s percentage share of the net

communications taxes revenues is: .01 x $38,900,000

2. VDDHH costs: $1,000,000 <$1,100,000>

= $389,000.

Net revenues available for

As Locality X’s percentage share of the net revenues

distribution to localities:

$38,900,000

must be reduced by the amount of the cable

Locality X would be entitled to a cable franchise

franchise fee distribution it would not be entitled

fee distribution of $350,000. Additionally, Locality

to a distribution based on its percentage share:

X would be entitled to a distribution based on its

Percentage share of distribution:

$389,000

percentage share of the net communications taxes

Less cable franchise fee distribution: <$400,000>

revenues: .01 x $38,900,000 = $389,000.

The distribution based on the percentage share must

<$11,000>

be reduced by the amount of the cable franchise fee

Locality X’s total distribution for the month would

distribution:

be limited to the $400,000 cable franchise fee

distribution. As the cable franchise fee distribution

Percentage share of distribution:

$389,000

to Locality X exceeded its percentage share of

Less cable franchise fee distribution: <$350,000>

the Fund by $11,000, the total revenues available

$39,000

for distribution to all localities based on their

Locality X’s total distribution for the month would

APA determined percentage would be reduced

be $350,000 + 39,000 = $389,000.

by $11,000. Although the total amount paid from

the Fund to Locality X and other localities which

receive their entire distribution as a cable franchise

fee distribution would not be affected, the amount

distributed to localities entitled to a distribution

based on their APA determined percentage would

be proportionately reduced based on their APA

determined percentage. This reduction will have

no effect on distributions in subsequent months.

Additional Information

These guidelines and rules are available on-line in the

Tax Policy Library section of TAX’s web site, located

at For additional information,

please contact the Office of Customer Services at

(804) 367-8037.

Approved:

___________________________________

Janie E. Bowen

Tax Commissioner

November 1, 2006

CT-2 W

REV 11/06

Page 16

Form Ct-2 - Guidelines And Rules For The Virginia Communications Taxes Page 16

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