Tax Type
Property Tax
Description
Tax Situs of Tractor Trucks Registered Out-of-State by a Foreign Corporation and Leased by Virginia Resident; Liability for Registration Requirements
Topic
Local Power to Tax
Local Taxes Discussion
Property Subject to Tax
Date Issued
10-19-1964
This is in reply to your letter of October 1, 1964, in which you ask my opinion relative to two questions regarding vehicles licensed in the State of Delaware, but based in Accomack County, Virginia.
[Question of liability for personal property tax]
First, you inquire what the Commissioner of Revenue should do in the case of a number of local trucking companies incorporated in the State of Delaware, which have paid personal property taxes on their vehicles in Accomack County in the past without protest, but are now instructing the Commissioner to remove the vehicles from the personal property tax rolls because they are owned by a Delaware corporation.
The fact that the vehicles are owned by a Delaware corporation does not exempt them from the tangible personal property tax laws of Virginia. The situs of tangible personal property for taxation is the locus of the property itself, rather than the domicile of the person required to be taxed. See, Taylor v. Commonwealth, 124 Va. 445. In this relation, § 58-834, Code of Virginia (1950), as amended, quotes as follows:
``The situs for the assessment and taxation of tangible personal property, merchants' capital and machinery and tools shall in all cases be the county, district or city in which such property may be physically located on the first day of the tax year.' (Emphasis supplied.)
[Finding vehicles subject to local taxation]
As pointed out in the case of Hogan v. Norfolk County, 198 Va. 733, the situs for taxation as used in this section means something more than the place where the property is. It does not mean property that is casually or incidentally there, but it is sufficient if it is there and being used in such a way as to be fairly regarded as part of the property of the county. The vehicles are based in Accomack County, and, under the facts, it appears that they were physically located there on the first day of the tax year. They are not located there casually, as the vehicle of a visitor passing through, or under circumstances of a transient nature. The trucking companies have been using Accomack County as their base of operations while engaged in the trucking business during this and prior years. Previously, they have recognized this as the proper jurisdiction for tax purposes and have paid the local personal property assessments. Under the circumstances, it is my opinion that the vehicles are subject to local taxation in Accomack County and, if the taxpayer liable fails or refuses to file a return for same, the Commissioner of Revenue should enter the fair market value of such vehicles and make the assessment in accordance with § 58-838, Code of Virginia (1950), as amended.
[Question on liability for license requirements]
Secondly, you inquire whether Delaware corporations having bases of operations in Accomack County are required to purchase Virginia license plates.
In my judgment, the vehicles so based in Virginia must comply with Virginia registration requirements. Generally, the tractor trucks are registered in the name of a Delaware corporation and leased to a Virginia resident. The trailers drawn by such tractor trucks are registered in Virginia. Although the Reciprocity Agreement with Delaware dated May 5, 1943, to which you refer, leaves something to be desired under present conditions, it contains no clause permitting operations from a Virginia base on Delaware registration. Further, it contains no clause relative to leased vehicles. Under § 46.1-1 (16) (b), Code of Virginia (1950), as amended, ``a person who becomes engaged in a gainful occupation in this State for a period exceeding sixty days shall be deemed a resident for the purposes of this title,' which includes the registration laws. Obviously, it was not the intention of the signatories to permit such avoidance of the Virginia registration laws, as this would allow all vehicles engaged only in interstate commerce to register in the State of Delaware, to the exclusion of Virginia registration, regardless of the location of the business or base of operations. Exemption from taxation is the exception, rather than the rule, and any agreement under which such exemption is claimed should be strictly construed against the taxpayer.
Attorney General's Opinion