Want Your Virginia Tax Refund? Good Luck Avoiding a Fee, Thanks to the GOP.


    Have any of you experienced this or heard about it from others around Virginia?

    In 2012, Virginia’s Republican-controlled legislature enacted a budget provision that effectively forced the state’s tax department to outsource its refund system to a debit card company, claiming it would save the government hundreds of thousands of dollars annually. But the state’s deal with Xerox to replace tax refund checks with Comerica-issued debit card has meant headaches and fees for taxpayers and raised concerns about excessive outsourcing.

    When the Virginia General Assembly passed its 2012 budget, largely along party lines, it included a requirement that “beginning January 1, 2013, the State Comptroller shall issue individual income tax refunds only through debit cards, direct deposits, or other electronic means unless the Tax Commissioner determines that a check is more appropriate for a transaction or class of transactions.” Gov. Bob McDonnell (R) signed the bill and his Department of the Treasury contracted with a division of Xerox to replace refund checks with MasterCard debit cards. Xerox agreed to provide the Comerica Bank-issued cards “at no cost to the Commonwealth,” but retained the right to impose a litany of fees on the users.

    Weeks after the first tax refund debit cards were issued, the problems started. While the recipients were promised one free online transfer, anyone attempting to do so was informed that there would be a $2 fee.

    It happened to me when I took my Virginia tax refund debit card to the bank (Wells Fargo) and was charged a service fee ($2 or $3, I can’t remember). This is absurd, and also seems like a great case of Republican hypocrisy – taxpayers deserve their money back so we will give it to credit card companies through hidden fees. Argh.

    P.S. Actually, I still have a few dollars left on that card, because the ATM can’t dispense in lower than $20 denominations. So…when I go to get the rest of MY MONEY out of there, am I going to get hit with ANOTHER fee, thanks to Virginia Republicans?!? And guess what; this is going to happen to you as well, if it hasn’t already. You can thank Bob McDonnell, etc.

    • AShifflett

      I got the same card when I got my refund.  I was like, HELL NO I’m not paying a fee for my own refund.  Don’t go to an ATM machine.  Go into your bank’s lobby.  Ask for it all in cash.  PNC did that for me and didn’t charge me a thing.

    • glennbear

      I wonder if the “fee” can be deducted in the subsequent year as a tax related expense such as prep fees ?

    • kindler

      …as long as the money goes into the pockets of corporate CEOs.

      Now we see what Republicanism means…

    • Will the bank let you cash in the card if you don’t have an account with them?  There are many people who live paycheck to paycheck and don’t have bank accounts.  I’ve been there.  You have to either go to a check cashing agency and pay a huge fee, or find the bank that issued the check (which could be nowhere near Virginia.  

    • libra

      from my tax accountant, I plowed the entire refund back against next year’s taxes and am withholding less this year, in hope of being “even steven” in ’14. We’ll see how that works. But your point stands: having to pay fees to get to your own money stinks to high heaven. Here’s another (national, not limited to VA) way people get screwed by fees, when trying to access their own money: