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.