Tax Type
Local Taxes
Property Tax
Description
Taxation of Property in Area Annexed to Town; Land Use Ordinance
Topic
Collection of Tax
Exemptions
Local Power to Tax
Local Taxes Discussion
Property Subject to Tax
Date Issued
05-13-1987
[Opinion - Virginia Attorney General: 1987 at 301]
REQUEST BY: Honorable J. Robert Dobyns Member, House of Delegates
OPINION BY: Mary Sue Terry, Attorney General
OPINION:
You ask two questions concerning property taxation in a newly annexed area. You first ask whether the Town of Pulaski (the "town") may impose real and tangible personal property taxes within the area annexed by the town for any portion of the year following the effective date of annexation. You next ask whether the town may enact a land use assessment and taxation ordinance for the annexed area to be effective on the expected effective date of the annexation, July 1, 1987. Both the town and the County of Pulaski operate on a July 1 through June 30 fiscal year basis and have designated the prior January 1 as the date of assessment in accordance in §58.1-3010 of the Code of Virginia.
I. Constitution Requires Property in Annexed Area to Be Taxed from Date of Annexation
Your first question has been answered by a prior Opinion of this Office. See 1985-1986 Report of the Attorney General at 257. The constitutional requirement of uniformity, Art. X, §1 of the Constitution of Virginia (1971), requires the town to tax the annexed area from the date of annexation in the same manner that it taxes all other real and tangible personal property in the town. Since the effective date of annexation and the beginning of the fiscal year coincide, the town will not need to adopt a short year for the annexed area, as was necessary in the prior Opinion. The assessment dates will not need to be changed because both jurisdictions use the same date, January 1.
II. Town May Not Adopt Land Use Taxation Ordinance Applicable Only to Annexed Area
In response to your second question, the town may only adopt a land use taxation ordinance under the rules of §58.1-3231, which is the general statute granting counties, cities and towns the authority to provide for use value assessment and taxation.1 Under §58.1-3231, January 1, 1988 is the earliest date at which the town can have an effective ordinance. The deadline for adopting an ordinance effective on that date is June 30, 1987. Based on the foregoing, it is my opinion that the town cannot adopt a land use taxation ordinance which will be effective on July 1, 1987, and which will apply only to the annexed area. Any land use taxation ordinance adopted by the town must apply to the entire town and cannot be effective until January 1, 1988.
1 Section 58.1-3232, which specifically authorizes land use taxation ordinances covering newly annexed areas, applies only to cities, not to towns. The limited scope of §58.1-3232 is a choice of the General Assembly, exercised in apparent recognition of the fact that the taxing jurisdiction of cities and counties is mutually exclusive, and that former county residents living in the annexed area who were enrolled in the county's land use taxation program stand to lose the benefit of that program unless the city is able to enact a land use taxation ordinance for the annexed area. Conversely, the taxing jurisdiction of towns and counties is, for the most part, concurrent. Cf. §58.1-3711. A county taxpayer who is enrolled in the county's land use taxation program will not lose his participation in such program by virtue of the fact that he resides in territory annexed by the town.
Although §15.1-1167.1 allows broad latitude for counties and towns to settle voluntarily a broad range of annexation issues, I find no language in that statute which would embrace as a proper subject for such a settlement, either directly or indirectly, the issue of land use taxation in the annexed area.§58.1-3232 is the exclusive statutory authority for land use taxation in annexed areas. Cf. §15.1-1047.1.
Attorney General's Opinion