78-120 | Virginia Tax

Tax Type

General Provisions

Description

1978 Legislative Digest

Topic

Reports

Date Issued

05-01-1978

1978

Legislative Digest

VIRGINIA DEPARTMENT OF TAXATION

Research Division
Department of Taxation
P.O. Box 6-L Richmond, Va. 23282
May, 1978

CONTENTS

INTRODUCTION

STATE TAXES
General
Beer and Malt Beverage Tax
Capital Not Otherwise Taxed
Forest Products Tax
Income Tax
Inheritance and Gift Taxes

License Taxes
Pari-Mutuel Horseracing License Tax

Recordation Taxes
Sales and Use Tax
Tobacco Tax

LOCAL TAXES

General
Admissions Tax
Coal Road Improvement Tax
License Tax
Merchants' Capital Tax
Personal Property Tax
Real Property Tax

INDEX OF BILLS AND RESOLUTIONS INTRODUCTION

This digest is published by the Department of Taxation as a convenient reference guide to bills affecting state and local taxation that were enacted by the 1978 Session of the General Assembly. It is not intended as a definitive interpretation of the law, but should be useful to state and local officials as well as citizens in understanding the enactments.

To make the 1978 digest a more useful and comprehensive publication, it is organized according to the enactments affecting state taxes, which appear first, followed by those affecting local taxes. Beneath the state or local heading, the specific tax subjects are arranged alphabetically with the appropriate bills beneath them in numerical order. Senate bills and resolutions appear first, followed by House bills and resolutions. An index of bills and resolutions appears at the end of the digest.

STATE TAXES

GENERAL

HOUSE BILL NO. 668 (Chapter 334)

This act amends § 8.01-261 to restore to the taxpayer seeking relief for correction of an erroneous assessment of state taxes the option of applying for relief to the Circuit Court of Richmond, in addition to the other preferred places of venue. (This option was eliminated by the 1977 Session's revision of Title 8 relating to civil remedies and procedures (Chapter 617.) The act is effective July 1, 1978.

HOUSE BILL NO. 1192 (Chapter 802)

This act amends § 2.1-393 and repeals § 2.1-392 to change from September 15 to November 15 the date by which the Governor must submit his annual report of anticipated general fund and major nongeneral fund revenues for a six-year period and to repeal the requirement that all state agencies must submit in every even-numbered year an estimate of anticipated expenditures for a six-year period. The act is effective July 1, 1978.

BEER AND MALT BEVERAGE TAX

HOUSE BILL NO. 787 (Chapter 795)

This act amends §§ 4-40 and 4-108 and repeals the second enactment clause of Chapter 695 of the 1976 Acts in order to permanently retain the beer and beverage tax rates in effect on January 1, 1978, at 2.65 per 12 ounce bottle or can. (The 1976 act required that the beer tax increases enacted at that session expire on July 1, 1978.) The act also allows to dealers a commission of one percent of the tax beginning with the date of the first report filed on or after July 1, 1980. The act is effective July 1, 1978.

CAPITAL NOT OTHERWISE TAXED

SENATE BILL NO. 456 (Chapter 784)

See INCOME TAX.

HOUSE BILL NO. 1175 (Chapter (425)

This act adds a new § 58-418.1 to provide that the valuation of depreciable property, for purposes of the state tax on capital not otherwise taxed, shall be the adjusted basis for federal income tax purposes (cost or other tax basis less accumulated depreciation.) The act is effective for tax years beginning on and after January 1, 1978.

- - - - FOREST PRODUCTS TAX

HOUSE BILL NO. 591 (Chapter 72)

This act amends §§ 58-838.5:2 and 58-838.7:1 to substitute the International ¼" Kerf Rule for the present Doyle Rule for measuring the board feet contents of timber sold as logs, for measuring the board feet contents of veneer logs, and as the basis for appropriating funds for reforestation. The act is effective July 1, 1978, and expires July 1, 1990.

- - - - INCOME TAX

SENATE BILL NO. 303 (Chapter 157)

This act amends §§ 58-151.21 and 58-151.22 to conform to the federal individual income tax law allowing fishermen to file declarations of estimated tax at any time on or before January 15 of the succeeding year. (Farmers, including oyster farmers, are already allowed this extension of time under Virginia law.) The act is effective for taxable years beginning on and after January 1, 1978.

SENATE BILL NO. 317 (Chapter 158)

This act amends § 58-151.013(d)(e) to eliminate for individual income tax purposes the reference to the federal standard deduction and low income allowance as it relates to the taxpayer's current federal tax return. The federal Tax Reduction and Simplification Act of 1977 replaced the standard deduction with a table of "zero bracket amounts." There is no provision for a taxpayer to elect the standard deduction and he must use the zero bracket amount unless his itemized deductions exceed the zero bracket amount. Therefore, for Virginia tax purposes, if itemized deductions are not allowable on the federal return, then they are not allowable on the Virginia return. The act is effective for the tax years beginning on and after January 1, 1978.

SENATE BILL NO. 319 (Chapter 159)

This act amends §§ 58-151.03(c) and 58-580 to provide that only public service corporations that actually pay a state franchise tax or license tax upon gross receipts are not required to pay the Virginia income tax and that any telephone company which pays no tax on its gross receipts shall pay, in addition to the pole line tax, a tax on its income. The act is effective for taxable years beginning on and after January 1, 1978.

SENATE BILL NO. 366 (Chapter 161)

This act amends § 58-46 to strengthen the confidentiality protection afforded federal tax return information. The sanctions against unauthorized disclosures of federal tax return information are extended to former as well as present state or local tax or revenue officers or employees. The statute is broadened to include specifically as protected information any copy of a federal return or federal return information required by law to be attached to or included with a Virginia state return. The act also prohibits the Governor from making public any federal returns or federal tax information. The act is effective July 1, 1978.

SENATE BILL NO. 454 (Chapter 166)

The act amends § 58-151.067 to allow a taxpayer who reasonably expects to qualify for a foreign income exclusion an extension of time for filing his Virginia income tax return to 30 days after the qualifying period expires. This conforms to the federal law pertaining to the foreign income exclusion. The act is effective July 1, 1978.

SENATE BILL NO. 455 (Chapter 783)

This act amends § 58-151.032 to require that the income of a foreign corporation that is earned outside the United States be included in the corporation's Virginia taxable income. The act is effective for taxable years beginning on and after January 1, 1978.

SENATE BILL NO. 456 (Chapter 784)

This act amends the provisions of the Code concerning the taxation of railway companies in order to brig Virginia into compliance with the federal Railroad Revitalization and Regulatory Reform Act of 1976. Effective for taxable years beginning on and after January 1, 1979, the act repeals §§ 58-516.1, 58-520, 58-520.1, 58-526 and 58-527, thereby repealing the gross receipts tax on railway companies. The act also adds new §§ 58-151.032:2 and 58-151.050:3 and amends §§ 58-519 and 58-523 to impose the income tax on the railway company's federal taxable income, subject to certain adjustments. The act amends § 58-441.6, the sales tax exemption section, to ensure the exemption currently granted to railway companies. The act amends § 58-456 to impose on railway companies the annual state franchise tax on domestic corporations.

The act adds a new § 58-514.2:2 to provide that beginning with assessments of real estate and tangible personal property initially effective January 1, 1980, all assessments must be made by application of the prevailing local assessment ratios as determined and published by the Department of Taxation. This section and amendments to §§ 58-518 and 58-522 provide that all local taxes on such railway property must be at the real estate rate applicable in the respective locality.

The act further amends § 58- 519 to clarify that in addition to the income tax, the tax on capital not otherwise taxed (§58-418); the annual registration fee (§ 58-450); the annual state franchise tax on domestic corporations (§ 58-456); assessments for local improvements; and county, city, town, or magisterial district levies will be imposed on railway companies.

The act deletes provisions in §§ 58-529, 58-530, 58-531, and 58-539 concerning reports on gross receipts required to be submitted by railway companies to the State Corporation Commission.

The act is effective for taxable years beginning on and after January 1, 1979, except that §§ 58-514.2:2, 58-518 and 58-522 concerning the assessment of real and tangible personal property are effective beginning with assessments of property made as of January 1, 1980. Although the gross receipts tax on railway companies is repealed effective for the taxable year January 1, 1979, taxes on the gross receipts of railway companies earned during 1978 will be collected.

SENATE BILL NO. 458 (Chapter 785)

This act amends § 58-151.032 to allow a corporation, in determining its Virginia taxable income, to subtract from federal taxable income the amounts that would have been deductible if the corporation had not elected the additional investment tax credit under § 46(a)(2)(b) of the internal Revenue Code. The act is effective for taxable years beginning on and after January 1, 1978.

SENATE BILL NO. 504 (Chapter 184)

This act amends § 58-151.042 to clarify the property factor used for apportioning income earned by multi-state corporations. It provides that the average value of real and tangible personal property rented to a corporation shall be excluded from the numerator and denominator of the property factor to the extent that rents or royalties earned from such rented property have been allocated to a state. The act is effective for taxable years beginning on and after January 1, 1978.

SENATE JOINT RESOLUTION NO. 21

This resolution requires the formation of a joint subcommittee of the Senate and House Finance Committees to study the state income tax structure, including conformity, rates and exemptions, and to present recommendations to improve the equity of the tax in a report to the Governor and General Assembly by November 1, 1979.

HOUSE BILL NO. 142 (Chapter 67)

This act amends § 58-151.013 and 58-151.032 to provide a subtraction for individuals and corporations equal to the amount of wages and salaries eligible for the federal New Jobs Credit that was not deductible for federal purposes as required by § 280C of the Internal Revenue Code. The act is effective for taxable years beginning on and after January 1, 1978.

HOUSE BILL NO. 797 (Chapter 796)

This act amends §§ 58-151.03 and 58-151.062 to provide that no income tax must be paid and no income tax return must be filed by single persons whose "Virginia adjusted gross income" for the taxable year is less than $3,000 nor by married couples whose combined "Virginia adjusted gross income" is less than $3,000. "Virginia adjusted gross income is defined as federal adjusted gross income with the modifications specified in § 58-151.013(b)(Additions), § 58-151.013 (c) (Subtractions), and the additional $400 personal exemption for those 65 years of age or over allowed under § 58-151.013(d)(3). The act is effective for taxable years beginning on and after January 1, 1979.

HOUSE JOINT RESOLUTION NO. 184

This joint resolution requests the Finance Committees of the House and Senate to study viable incentives to families who care for elderly relatives in their homes, including income tax subtractions or deductions, property tax exemptions or deferrals, increased appropriations for the delivery of home health services, and provisions in insurance coverage to include reimbursement for the care of dependent adults. The State Tax Commissioner and the SCC's Commissioner of Insurance are requested to cooperate with the committees in conducting this study. The committees are to report to the Governor and General Assembly by December 1, 1978.

INHERITANCE AND GIFT TAXES

SENATE BILL NO. 284 (Chapter 775)

This act amends § 58-155.1 to limit the application of special use-valuation of farm property for Virginia inheritance tax purposes. Only property included in an estate that is required to file a federal estate tax return can qualify for special valuation. The act is effective for estates of those dying on or after July 1, 1978.

SENATE BILL NO. 321 (Chapter 668)

This act amends § 58-199 to conform the interest rate on estates of nonresident decedents to the general interest rate under § 58-1160 for taxes administered by the department. Chapter 396 of the 1977 Acts of Assembly deleted all specific interest rates on taxes administered by the department and referred instead to § 58-1160 which conforms to the current interest rate of the Internal Revenue Code. An amendment to § 58-199 was inadvertently omitted in the 1977 legislation. Therefore, this act now makes all the interest rates uniform. The act is effective July 1, 1978.

SENATE BILL NO. 453 (Chapter 782)

This act adds a new § 58-162.1 to impose a tax on generation skipping transfers of Virginia residents or Virginia property in an amount equal to the amount allowable as a credit for state legacy -.axes under § 2602 of the Internal Revenue Code. The act is effective for all generation skipping transfers made on or after January 1, 1977.

SENATE BILL NO. 484 (Chapter 677)

This act amends § 58-180 concerning the terms for expiration of inheritance tax liens on real estate. The act provides that the lien will expire at the end of ten years from the decedent's death, if the department has not made an assessment, whether or not the real estate has been sold by the beneficiaries. The act further provides that whether or not an assessment has been made, the lien will absolutely expire at the end of 20 years, if there is no remainder or executory interest. The act is effective July 1, 1978.

HOUSE BILL NO. 441 (Chapter 444)

This act amends §§ 58-152 and 58-219 to bring Virginia's inheritance and gift tax law concerning gifts made in excess of $3,000 per year into conformity with both federal estate tax law and gift tax law. The amendment to § 58-152 provides that all gifts made within three years of death, except for a $3,000 annual exclusion, are taxable for inheritance tax purposes. The amendment to § 58-219 raises the gift tax exemption level for Classes B and C to $3,000. The act is effective for gifts made on and after July 1, 1978.

HOUSE BILL NO. 442 (Chapter 838)

This act amends § 58-70 and in Title 58 adds Chapter 6.1 and repeals Chapter 6 in order to abolish the current Virginia Inheritance and Gift Taxes, replacing them with a Virginia Estate Tax equal to the maximum state death tax credit allowed against the federal estate tax due. The act is effective for decedents dying on or after January 1, 1980. However, inheritance taxes due with respect to estates of decedents dying before January 1, 1980, will be assessed by the department pursuant to Chapter 5, the inheritance tax section of Title 58, which is not repealed but which will continue in force until all such inheritance taxes have been collected.

LICENSE TAXES

HOUSE BILL NO. 616 (Chapter 51)

This act amends § 58-402 to require that before any state tobacco retailer's license is issued, a retailer shall maintain an established place of business within the Commonwealth from which tobacco products are or will be regularly sold at retail. The act is effective July 1, 1978.

PARI-MUTUEL HORSERACING LICENSE TAX

HOUSE BILL NO. 204 (Chapter 600)

This act adds a new § 18.2-334.1 and in Title 59.1 a chapter numbered 19, establishing the structure for operating and regulating pari-mutuel horseracing facilities in Virginia, effective January 1, 1979, if approved by a majority of those voting in a referendum at the November 7, 1978 general election. The Virginia Racing Commission is created and invested with licensing, policy and regulatory authority. The Commission is to be composed of five members appointed by the Governor and approved by the General Assembly. No horseracing facility may be established in any city or county until a referendum on the issue has been approved. The Commission will consider all applications for a racetrack owner's license and may grant two licenses to construct a racetrack. The licensed operator of a horserace meeting at which pari-mutuel wagering is permitted is subject to state taxation at the rate of 5 percent of the handle and 33.3 percent of the legitimate breakage and the proceeds of pari-mutuel tickets unredeemed 60 days from the date of the race. The revenue from the taxation of the operator's license only will be divided equally between the Commonwealth and all the cities, counties and incorporated towns on the basis of population. There is also a state tax imposed upon the holder of a "limited license," that is, a license permitting the operator to hold a race meeting with wagering privileges not to exceed 14 days in any calendar year. The limited license tax is 3 percent of the handle and 20 percent of the legitimate breakage. The locality in which the facility is located may also impose an admission tax of 25 cents per person. The act is effective January 1, 1979 if it is approved by the voters at the November 7, 1978 referendum.

RECORDATION TAXES

SENATE BILL NO. 476 (Chapter 805)

This act amends § 58-55 to require that the maximum obligation outstanding at a time on an open or revolving deed of trust be used to determine the recordation tax due. The act also makes a technical effective date correction concerning the reduction in the recordation tax scheduled for July 1, 1978. The act is effective July 1, 1978.

HOUSE BILL NO. 201 (Chapter 68)

This act amends § 58-55 to correct a technical error in the 1977 amendment to § 58-55 and thus to affirm July 1, 1978, as the effective date for the reduction in the tax on the recordation of deeds of trust or mortgage. The act also establishes the liability of any person recording an instrument before July 1, 1978, for the full amount of the tax due prior to the tax reduction. It also removes the personal liability from any clerk who in good faith collected a reduced recordation tax for entering an instrument if the clerk is unable to collect the balance of the tax due. The act contains an emergency clause and is effective March 9, 1978.

HOUSE BILL NO. 538 (Chapter 714)

This act amends § 58-64 to limit the present recordation tax exemption for partnerships to only those cases in which property is being conveyed to a partnership and the grantors are entitled to at least 50 percent of the partnership profits and surplus, and to only those cases conveying property from a partnership, when the grantees are entitled to at least 50 percent of the profits and surplus of the partnership.

The act also provides a recordation tax exemption for real estate conveyed to a trustee or trustees of a trust when the grantors in the deed and the beneficiaries are the same persons. The act also provides a recordation tax exemption for the conveyance of real estate when the grantor is the personal representative of the decedent's estate and the sole purpose of the transfer is to comply with a devise or bequest in the decedent's will. The act is effective July 1, 1978.

HOUSE BILL NO. 678 (Chapter 418)

This act amends § 8.01-537 to require that all attachments, including those for rent, be commenced by a petition filed in the clerk's office. A writ tax on the attachment would thereby be required. Current law provides an exception for attachments for nonpayment of rent. The act is effective July 1, 1978.

HOUSE BILL NO. 745 (Chapter 693)

This act amends § 58-65 to clarify the procedures by which the clerk of court may ascertain the consideration of the deed or instrument and the actual value of the property conveyed in order to assess and collect the correct amount of recordation tax. The clerk may ascertain this by inquiry, affidavit, declaration or other extrinsic evidence. The act further provides that if the proper tax is not collected for a period of 30 days after notice to the clerk by the department, the department may proceed to assess and collect the state and local recordation tax. The act also provides that any person who knowingly misrepresents any of the information requested by the clerk is guilty of a Class 2 misdemeanor. The act is effective July 1, 1978.

SALES AND USE TAX

SENATE BILL NO.- 13 (Chapter 771)

This act repeals § 58-441.21:1, the sales tax acceleration provision, retroactively to July 1, 1977, and provides that payments made, including penalty and interest, shall be refunded to the dealers in accordance with the following provisions of House Bill No. 30 (Chapter 850), the 1978-80 General Appropriations Bill: (1) within 30 days of the effective date of House Bill No. 30 (July 1, 1978), the department will refund to each dealer any payment made in excess of one-half of the accelerated payment; (2) refunds of the remainder of the accelerated payments will be made contingent upon an unappropriated general fund surplus at the close of fiscal year 1978, and if the total surplus amount is unavailable, payments will begin with the dealers with smallest liability and refunded until the money is depleted. Any unpaid refunds resulting from a lack of "surplus" shall be paid from any general fund surplus in fiscal year 1979. The act contains an emergency clause and thus the repeal of § 58-441.21:1 is effective April 9, 1978. House Bill No. 845, (Chapter 798) is identical to this bill.

SENATE BILL NO. 124 (Chapter 773)

This act amends § 58-441.48(b) in order to clarify the intent of the 1977 Session, in enacting the accelerated sales and use tax payment under § 58-441.21:1, that one-third of the accelerated revenue is not to be distributed to localities but that all the revenue is to be deposited to the state's general fund. This act contains an emergency clause and is effective April 9, 1978. (Note: Senate Bill No. 13 (Chapter 771) and House Bill No. 845 (Chapter 798) repealed § 58-441.21:1, the accelerated sales tax, effective April 9, 1978.)

SENATE BILL NO. 236 (Chapter 665)

This act amends § 58-441.6 to exempt from the sales and use tax tangible personal property for use or consumption by a home for adults which has a facility operated on the same premises licensed by the Department of Health as a nonprofit nursing home facility. The act is effective July 1, 1978.

SENATE BILL NO. 349 (Chapter 656)

This act amends § 58-441.6 to exempt from the retail sales and use tax special equipment installed on a motor vehicle when purchased by a handicapped person to enable the person to operate the vehicle. The act also adds a new § 58-685.13:2 to exempt this equipment from the motor vehicle sales and use tax. The act also amends § 58-829 to add to the classification of tangible personal property a new class of motor vehicles with specially designed equipment for use by the handicapped and specifies that such property is not to be valued in relation to initial cost but rather to be valued at actual market value if offered for sale on the open market. The act is effective July 1, 1978.

SENATE BILL NO. 365 (Chapter 706)

This act amends § 58-441.3, the sales and use tax definition section, to clarify that storage or transportation of raw materials at the plant site before production, and transportation of the finished product from the plant site to the warehouse, are excludible activities for purposes of taxation. This amendment thus corrects the contradiction between paragraphs (p) and (q)-concerning the exclusion of manufacturing activities through the last step of production. The act is effective July 1, 1978.

SENATE BILL NO. 456 (Chapter 784)

See INCOME TAX.

HOUSE BILL NO. 128 (Chapter 82)

This act amends § 58-441.6 to exempt from the sales and use tax hearing aids sold on prescriptions or work orders of licensed audiologists and to exempt wheelchairs sold on prescriptions or work orders of licensed physicians. The act is effective July 1, 1978.

HOUSE BILL NO. 253 (Chapter 207)

This act amends § 58-441.15 to exempt from the sales and use tax purchases by a contractor of personal property to be used solely in another state or foreign country if the property could be purchased free 'from sales tax in the other state or country. The act also codifies the administrative interpretation of "another state" to include a foreign country. (Under current law contractors purchasing such property have to pay the Virginia sales tax and then apply to the department for a refund within 60 days after the completion of the project.) The act is effective July 1, 1978.

HOUSE BILL NO. 554 (Chapter 50)

This act amends § 58-441.6 to exempt from the sales and use tax meals furnished by restaurants or food service operators to employees as a part of wages. The act is effective July 1, 1978.

HOUSE BILL NO. 701 (Chapter 819)

This act amends § 58-441.6 to exempt from the sales and use tax all tangible personal property for use or consumption by a nonprofit volunteer fire department or volunteer rescue squad and to exempt construction materials to be incorporated into realty, sold to and used by such organization, rather than by a contractor. The act is effective July 1, 1978.

HOUSE BILL NO. 738 (Chapter 505)

This act amends § 58-441.6 to exempt from the sales and use tax hypodermic syringes and wheelchairs sold on a prescription or work order of a licensed physician. The act is effective July 1, 1978.

HOUSE BILL NO. 845 (Chapter 798)

This act repeals § 58-441.21:1, the sales tax acceleration provision, retroactively to July 1, 1977, and provides that payments made, including penalty and interest, shall be refunded to the dealers in accordance with the following provisions of House Bill No. 30 (Chapter 850), the 1978-80 General Appropriations Bill: (1) Within 30 days of the effective date of House Bill No. 30 (July, 1978), the department will refund to each dealer any payment made in excess of one-half of the accelerated payment; (2) refunds of the remainder of the accelerated payments will be made contingent upon an unappropriated general fund surplus at the close of fiscal year 1978, and if the total surplus amount is unavailable, payments will begin with the dealers with smallest liability and refunded until the money is depleted. Any unpaid refunds resulting from a lack of "surplus" shall be paid from any general fund surplus in fiscal year 1979. The act contains an emergency clause and thus the repeal of § 58-441.21:1 is effective April 9, 1978. Senate Bill No. 13 (Chapter 771) is identical to this bill.

HOUSE BILL NO. 952 (Chapter 181)

This act amends § 58-441.3, the sales and use tax definition section, to exempt from the tax tangible personal property purchased by publishers of newspapers or magazines when such property is to be used in the necessary ancillary activities of newspaper and magazine printing. Such newspapers or magazines must be for sale daily or regularly at average intervals not exceeding three months. The act is effective July 1, 1978.

HOUSE JOINT RESOLUTION NO. 156

This joint resolution directs the Revenue Resources and Economic Commission to study the sales tax related problems of the vending machine industry, determining the extent of the inequities imposed on the industry by present sales tax laws, and to present legislative recommendations to the Governor and General Assembly by December 1, 1978.

TOBACCO TAX

HOUSE JOINT RESOLUTION NO. 61

This joint resolution memorializes Congress to refrain from enacting legislation to increase federal taxes on tobacco products and to in no way prohibit states and political subdivisions thereof from taxing tobacco as they deem proper.

See also STATE-LICENSE TAXES - House Bill No. 616.

LOCAL TAX

GENERAL

SENATE BILL NO. 65 (Chapter 235)

This act amends § 15.1-504 concerning the adoption of ordinances in counties. The act deletes the requirements relating specifically to ordinances amending a tax statute and adds a requirement that no ordinance imposing or increasing any tax or levy shall be adopted unless 14 days have elapsed since the last publication of the intended ordinance. The act allows the proposed ordinance to be filed with the county administrator.

SENATE BILL NO. 288 (Chapter 395)

This act amends § 58-847, concerning filing dates and payment dates for local licenses and tangible personal property, machinery and tools, merchants' capital, and real property taxes. The act allows localities to assess a penalty for failure to file a return not to exceed 10 percent of the tax assessable or $10, whichever is greater. The act further clarifies that no penalty for failure to may any tax shall be imposed for any assessment made later than two weeks prior to the day on which the taxes are due, if such assessment is made thereafter through the fault of a local official, and if such assessment is paid within two weeks after the notice thereof is mailed. The act is effective July 1, 1978.

HOUSE BILL NO. 389 (Chapter 789)

This act amends § 58-1152.1 to require that if any local tax is-declared to be unconstitutional by a court of competent jurisdiction, a refund of the tax must be made in any case when the application therefor was made within two years after the final disposition of the case in which such constitutional issue was decided, only for such taxes paid during the five previous years. The act is effective July 1, 1978.

HOUSE JOINT RESOLUTION NO. 163

This joint resolution calls fur the establishment of a joint subcommittee of the House Finance and Appropriations Committees and the Senate Finance and Local Government Committees to study the various revenue needs and resources of the localities, particularly the local business, professional, and occupational license tax and the consumer utility tax, and to recommend resources to eliminate inequities in local taxation and to provide suitable and sufficient local revenue resources. The subcommittee is to report to the Governor and General Assembly by November 1, 1978

ADMISSIONS TAX

SENATE BILL NO. 420 (Chapter 432)

This act amends § 58-404.2 to, add Dinwiddie County to the list of counties authorized to levy an admissions tax of 10 percent. The act is effective July 1, 1978.

COAL ROAD IMPROVEMENT TAX

HOUSE BILL NO. 742 (Chapter 646)

This act adds a new § 58-266.1:2 to allow localities to impose a severance license tax on persons severing coal or gases, except methane, propane, and other, migratory gases, within the boundaries of the locality, for use in the improvement of public roads used in the transportation of coal. This tax would be levied in the same manner as the severance license tax permitted under § 58-266.1:1 and would be in addition to that tax. The rate of this coal road improvement tax must not exceed one-half of one percent of gross receipts on and after January 1, 1979, and must not exceed one percent on and after January 1, 1980. The tax cannot be imposed prior to January 1, 1979; the tax will expire December 31, 1986.

LICENSE TAX

SENATE BILL NO. 72 (Chapter 772)

This act amends § 58-266.1 to prohibit localities from imposing a license or other tax on or measured by receipts or purchases by a corporation that is a member of an affiliated group of corporations from other members of the same affiliated group. "Affiliated group" is defined as one or more chains of includible corporations connected through stock ownership with a common parent corporation. The act contains an emergency clause and is effective April 9, 1978.

SENATE BILL NO. 426 (Chapter 433)

This act amends § 58-266.4 to provide that receipts derived from branch offices by practitioners of professions shall be deducted from the base for measuring the gross receipts tax by the locality in which the principal office is located. The act is effective July 1, 1978.

HOUSE BILL NO. 696 (Chapter 817)

This act amends § 58-266.1, to modify the structure of the local business, professional, and occupational license taxes and to freeze the local merchants' capital tax rate and ratio at the January 1, 1978 level.

(1) Effective January 1, 1979, when any city or town imposes a license tax on merchants, such tax shall be in lieu of a merchants' capital tax. (Present law already requires this for counties.)

(2) Effective January 1, 1979, a county license tax may apply in towns if the governing body of the town provides that the county tax may apply.

(3) Effective January 1, 1979, gross receipts from machines vending merchandise or postage shall be deemed gross receipts from retail sales. (However, House Bill 939, Chapter 799 of the 1978 Acts, makes this provision apply July 1, 1978.)

(4) Effective January 1, 1979, there will be a ceiling on local license taxes equal to the greater of $30 or the tax per $100 of gross receipts as computed for the following classes: contracting, $0.16; retail sales, $0.20; financial, real estate, and professional services, $0.58; repair, personal, and business services and all other businesses and occupations not listed or excepted, $0.36. These rate limitations are not applicable to wholesalers, public service corporations, fortune tellers, massage parlors, or carnivals. The limitation with respect to wholesalers is in § 58-441.49 at $0.05 per $100 of purchases. Localities whose tax rate on any category on January 1, 1978 already exceeds the prescribed ceilings may maintain the higher rate, provided that the locality may not increase any rate set lower than the maximum rate without applying all revenue generated by such rate increase to a reduction of any rate or rates higher than the prescribed maximums.

(5) The provisions of § 58-266.1 shall apply to cities and towns as though this section were their sole authority for levying the taxes authorized by this section, charter provisions to the contrary notwithstanding.

(6) The Department of Taxation must develop regulations defining and explaining the four business classes set forth. The State Tax Commissioner is vested with the authority to issue advisory written opinions relating to the local license tax and such regulations.

(7) The tax rate or assessment ratio for merchants' capital tax shall not be greater than such rate and ratio in effect on January 1, 1978.

(8) On January 1, 1983, any county, city, or town whose rates in any category are higher than the prescribed maximums may maintain the higher rates only if the locality does not realize in any subsequent year greater revenue from such taxes than it received during the preceding tax year. If in any year after January 1, 1983, such revenues are higher than the preceding year, the locality must tower the rates for the subsequent year on one or more classes taxed at rates above the prescribed ceilings, so that the total revenues in the following tax year can be reasonably expected to be the amount received in the preceding tax year plus one-third of such excess revenues. This provision will apply only until all rates are within the prescribed maximums.

(9) The act is effective for tax years beginning on and after January 1, 1979, provided that any locality that increases its license tax rates or increases its rate or ratio on merchants' capital on or after February 1, 1977 to a rate higher than the rate in effect on that date must roll back such tax on July 1, 1978 to the February 1, 1977 rate and refund any amount in excess thereof.

HOUSE BILL NO. 939 (Chapter 799)

This act amends § 58-266.1 to specify for local business, professional, and occupational license tax purposes that gross receipts from machines vending merchandise or stamps shall be deemed receipts from retail sales and taxed at the same rate as other retail sales. The act also provides that a locality may not impose a license tax at a specified per-machine amount on individual coin-operated machines. The act further provides that any locality may impose the license tax not to exceed $200 on the operator of a coin-operated machine when any such machine of the operator is located in the locality, even though the operator has no definite place of business and maintains no office in the locality. The act is effective July 1, 1978.

MERCHANTS' CAPITAL TAX

HOUSE BILL NO. 696 (Chapter 817)

See LICENSE TAX.

PERSONAL PROPERTY TAX

SENATE BILL NO. 102 (Chapter 843)

This act amends § 58-829 to add to the classification of tangible personal property a new class of motor vehicles with specially designed equipment for use by the handicapped. These motor vehicles are to be valued at the actual market value if offered for sale on the open market rather than valued in relation to their initial cost. For clarification, the act revises the paragraph that classifies all motor vehicles except mobile homes, antique automobiles, and motor vehicles with equipment for the handicapped. The act is effective July 1, 1978.

SENATE BILL NO. 169 (Chapter 654)

See REAL PROPERTY TAX.

SENATE BILL NO. 231 (Chapter 393)

This act amends § 58-837 to require that every owner of machinery and tools include on his annual personal property tax return the original total capitalized cost of all his machinery and tools in the taxing jurisdiction. The act also clarifies that any locality may provide for a filing date for tangible personal property other than May 1. (This is already provided in § 58-847 of Chapter 17 concerning local taxation in general.) The act is effective July 1, 1978.

SENATE BILL NO. 277 (Chapter 155)

This act adds a new § 58-829.5 to create a separate classification of tangible personal property for aircraft seating a maximum of 36 passengers and which are owned and operated by scheduled air carriers operating under certificates of public convenience and necessity issued by the State Corporation Commission or the Civil Aeronautics Board. The ratio of assessment and rate of tax on this classification may not exceed that applicable to other classes of tangible personal property. The act is effective on and after January 1, 1979.

SENATE BILL NO. 349 (Chapter 656)

See SALES AND USE TAX.

HOUSE BILL NO. 425 (Chapter 178)

This act amends § 58-829 to clarify that the various classifications of personal property are not to be considered separate categories for rate purposes but for valuation purposes. Various methods of valuing the different classes may be used so long as the methods may reasonably be expected to determine actual fair market value. The act also sets up a new class of property for taxicabs. The act is effective July 1, 1978.

HOUSE BILL NO. 543 (Chapter 216)

This act adds a new § 58-12.83 to exempt from local personal property taxation church owned vehicles designed to carry more than ten passengers and used by the church for religious purposes. (These vehicles are already exempt under § 58-12.24.) The act is effective January 1, 1979.

REAL PROPERTY TAX

SENATE BILL NO. 63 (Chapter 116)

This act repeals §§ 58-765, 58-766 and 58-766.1 in order to repeal the requirement that a building permit be issued by the Commissioner of the Revenue prior to commencement of construction, repair or improvement of buildings. The act is effective July 1, 1978.

SENATE BILL NO. 169 (Chapter 654)

This act clarifies § 58-27.2, providing tax relief to owners of real and personal property destroyed by common disaster and uncompensated for by insurance. It clarifies that the relief is for the remainder of the tax year after the date on which the disaster occurred. The act is effective July 1, 1978.

SENATE BILL NO. 260 (Chapter 774)

This act amends § 58-760.1 to provide that certification of permanent and total disability by the Veteran's Administration and the Railroad Retirement Board would be acceptable in meeting eligibility requirements for property tax relief. The act also defines the term "permanently and totally disabled" and permits one of the two medical doctors certifying permanent and total disability to do so without a physical examination of the applicant if this affidavit is based upon medical information contained in the records of the Civil Service Commission. The act contains an emergency clause and is effective for tax years beginning on and after January 1, 1978.

SENATE BILL NO. 305 (Chapter 776)

This act amends § 58-760.1 to increase the maximum financial net worth and annual income limitations in order to qualify for real estate tax relief for elderly or permanently and totally disabled taxpayers. The maximum net worth limitation is increased from $35,000 to $50,000 and the maximum combined income limitation from $10,000 to $12,000. Also, the act increases from $11,000 to $13,000 the optional income limitation that a governing body may adopt, provided that the exemption is reduced by the amount that income exceeds $12,000. The act is effective July 1, 1978.

SENATE BILL NO. 322 (Chapter 777)

This act amends § 58-760.1 to clarify that local real estate tax relief ordinances may provide for deferral of real estate taxes for permanently and totally disabled persons and specifies that these taxpayers become eligible for real estate tax relief for any year following the date the disability occurred. (This act corrects drafting omissions in the 1977 act (Chapter 543) that extended real estate relief to permanently and totally disabled taxpayers.) The act contains an emergency clause and is effective April 9, 1978.

SENATE BILL NO. 371 (Chapter 780)

This act amends § 58-760.1 to allow elderly or permanently and totally disabled owners of mobile homes meeting common law definitions of a "fixture" to qualify for real estate tax relief. The act is effective July 1, 1978.

SENATE BILL NO. 385 (Chapter 250)

This act amends §§ 58-769.6 and 58-769.8 to allow Franklin County to adopt a use-value ordinance no later than May 1, 1978, effective for the tax year beginning January 1, 1978. Also, applications for use-value assessment by Franklin County property owners must be filed for 1978 within 30 days of the adoption of an ordinance. The act contains an emergency clause and is effective March 25, 1978.

SENATE BILL NO. 456 (Chapter 784)

See INCOME TAX.

HOUSE BILL NO. 106 (Chapter 644)

This act amends § 58-769.8 to authorize the governing body of a locality to permit by ordinance late filing for use-value assessment of real estate, but within no more than 60 days after the normal filing deadline, upon payment of a late filing fee established by the governing body. The act also allows an exception for Franklin County for the 1978 tax year only, so that applications for use-value assessment must be filed within 30 days after an ordinance is adopted. (See S. B. 385. ) The act is effective July 1, 1978.

HOUSE BILL NO. 125 (Chapter 711)

The act amends § 15.1-242 to change the eligibility conditions under which a locality may provide for the postponement for elderly property owners of payment of taxes for certain local improvements. The maximum total combined income limitation is raised from $7,500 to $12,000 and the maximum financial net worth limitation is raised from $20,000 to $50,000. The act is effective July 1, 1978.

HOUSE BILL NO. 141 (Chapter 261)

This act provides for the submission to the voters in an election to be held on November 7, 1978, of a proposed amendment to § 6 of Article X of the Constitution of Virginia for ratification or rejection. The proposed amendment would allow the General Assembly by general law to authorize a local governing body to partially exempt from taxation real estate whose improvements, by virtue of age and use, have undergone substantial renovation, rehabilitation, or replacement. The proposed amendment was approved by the 1977 Assembly (Ch. 686) and by the 1978 Assembly (Ch. 851). Upon approval of a majority of those voting in the referendum, the amendment will be effective January 1, 1979. (See also House Joint Resolutions 15 and 127 -- REAL PROPERTY TAX)

HOUSE BILL NO. 343 (Chapter 788)

This act amends § 58-760.1 to allow a local ordinance for real estate relief for elderly or totally disabled taxpayers to include a provision for late filing by first-time applicants. The act is effective July 1, 1978.

HOUSE BILL NO. 423 (Chapter 790)

This act amends § 58-760.1 to allow local real estate tax relief ordinances to include a provision for late filing in "hardship cases." The act is effective July 1, 1978.

HOUSE BILL NO. 647 (Chapter 645)

This act amends § 58-769.8 to provide a deadline for revalidation of applications for use-value taxation. This deadline would be set at the date on which the last installment of property tax is due, prior to the effective date of the assessment. The act also provides that the governing body may provide for late filing of revalidation, before the effective date of the assessment, upon payment of a late filing fee. The act is effective July 1, 1978.

HOUSE BILL NO. 719 (Chapter 692)

This act amends § 58-851.7 to provide that any locality, whether on a calendar tax year or fiscal tax year, may adopt a July 1 assessment of real estate, tangible personal property, and machinery and tools. It also provides that any locality adopting a fiscal year assessment of tangible personal property must require that a prorated refund or credit be given for the portion of the year that the property was legally assessed by another locality and the tax paid. The act is effective July 1, 1978.

HOUSE BILL NO. 873 (Chapter 848)

This act amends § 58-12.79 to permit any locality to provide for the "special assessment and valuation" of real property that is subject to a recorded easement permitting the inundation of by water even if the property is not inundated. This act is effective July 1, 1978.

HOUSE BILL NO. 1148 (Chapter 54)

This act amends § 58-1117.4 to raise the value ceiling for real estate parcels assessed against and owned by different parties which may be covered by one bill in equity for judicial sale to collect delinquent real estate taxes. The ceiling is raised from $2,500 to $20,000 in assessed value per parcel. The act is effective July 1, 1978.

HOUSE BILL NO. 1181 (Chapter 385)

This act amends § 58-769.13 to provide that any separation or split-off of lots or parcels of real estate subject to use-value assessment shall subject the real estate so subdivided to the roll-back tax imposed under § 58-769.10. If the resulting parcels of real estate meet the minimum acreage requirements and the purposes set forth in the use-value assessment statute as so attested by the owner, the roll-back tax would not apply. The act is effective July 1, 1978.

HOUSE JOINT RESOLUTION NO. 15 (Chapter 851)

This joint resolution proposes an amendment to Article X, § 6 of the Constitution of Virginia to allow the General Assembly by general law to authorize a local governing body to partially exempt from taxation real estate whose improvements, by virtue of age and use, have undergone substantial renovation, rehabilitation, or replacement. House Bill No. 141 (Chapter 261) was also enacted at the 1978 Session in order that this amendment can be submitted to the public in a referendum at the November 7, 1978 general election. The amendment would then be effective January 1, 1979, if approved by the voters. (See HB 141 and HJR 27. )

HOUSE JOINT RESOLUTION NO. 32

This joint resolution requests that the House and Senate Finance Committees study the entire subject of property tax exemptions for charitable organizations and other organizations relating to or supported by charity and that the committees report their findings to the 1979 Session.

HOUSE JOINT RESOLUTION NO. 64

This joint resolution calls for the appointment of a joint subcommittee of the House and Senate Finance Committees and two citizens to study the equity of the property tax on real rental property and to report its findings and recommendations to the Governor and General Assembly by November 1, 1978.

HOUSE JOINT RESOLUTION NO. 127

This joint resolution requests a joint subcommittee of the House Finance and Counties, Cities, and Towns Committees and the Senate Finance and Local Government Committees to study, propose and draft enabling legislation to permit local governments to provide tax exemptions for rehabilitated property. This enabling legislation would encompass the language of the amendment to Article X, § 6 of the Constitution as proposed in HJR 15 (Chapter 851) and HB 141 (Chapter 261) of the 1978 Session and which will become effective January 1, 1979, if approved by the voters in the November 7, 1978 referendum.

HOUSE JOINT RESOLUTION NO. 155

This joint resolution requests that the Revenue Resources and Economic Commission study all aspects and phases of the real property tax, including evaluating the role of the property tax as a local tax and the merits of such tax, examining the equities of such tax, studying the incidence of the tax burden and relief for elderly and low-income families and analyzing the significance of tax rate and tax assessment disparities across the Commonwealth. The Commission is to report its conclusions and recommendations to the Governor and General Assembly by November 1, 1978.

INDEX OF BILLS AND RESOLUTIONS

SENATE BILL OR RESOLUTION NO.

SB 13 State-Sales and Use Tax (Accelerated Repeal)
SB 63 Local-Real Property Tax (Building Permits)
SB 65 Local-General (Adoption of Tax Ordinances)
SB 72 Local-License Tax (Affiliated Groups)
SB 102 Local-Personal Property Tax (Disabled)
SB 124 State-Sales and Use Tax (Acceleration)
SB 169 Local-Real Property Tax (Disabled)
SB 231 Local-Personal Property Tax (Machinery and Tools
SB 236 State-Sales and Use Tax (Homes for Adults)
SB 260 Local-Real Property Tax (Disabled)
SB 277 Local-Personal Property Tax (Aircraft)
SB 284 State-Inheritance Tax (Use-Value)
SB 288 Local-General (Failure to File)
SB 303 State- Income Tax (Fishermen)
SB 305 Local-Real Property, Tax (Elderly)
SB 317 State-Income Tax (Standard Deduction)
SB 319 State-Income Tax (Telephone Companies)
SB 321 State-Inheritance Tax (Interest Rate)
SB 322 Local-Real Property Tax (Disabled)
SB 349 State-Sales and Use Tax (Disabled)
SB 365 State-Sales and Use Tax (Manufacturing)
SB 366 State-Income Tax (Confidentiality)
SB 371 Local-Real Property Tax (Elderly/Disabled)
SB 385 Local-Real Property Tax (Use-Value)
SB 420 Local-Admissions Tax
SB 426 Local-License Tax (Branch Offices)
SB 453 State-Inheritance Tax (Generation Skipping)
SB 454 State-Income Tax (Extension)
SB 455 State-Income Tax (Foreign Corporations)
SB 456 State-Income Tax (Railway Companies)
SB 458 State-Income Tax (Investment Tax Credit)
SB 476 State-Recordation Tax (Deed or Trust)
SB 484 State-Inheritance Tax (Liens)
SB 504 State-Income Tax (Rental Property)
SJR 21 State-Income Tax (Study Tax Structure)

HOUSE BILL OR JOINT RESOLUTION NO.

HB 106 Local-Real Property Tax (Use-Value Filing)
HB 125 Local-Real Property Tax ( Improvement Levy)
HB 128 State-Sales and Use Tax (Audiologists; Wheelchairs)
HB 141 Local-Real Property Tax (Constitutional Amdt.)
HB 142 State-Income Tax (New Jobs Credit)
HB 201 State-Recordation Tax (Effective Date)
HB 204 State-Pari-Mutuel Horseracing License
HB 253 State-Sales and Use Tax (Contractors)
HB 343 Local-Real Property Tax (Elderly/Disabled)
HB 389 Local-General (Unconstitutional Taxes)
HB 423 Local-Real Property Tax (Elderly/Disabled)
HB 425 Local-Personal Property Tax (Taxicabs)
HB 441 State-Inheritance and Gift Tax ($3,000 gifts)
HB 442 State-Inheritance and Gift Tax (Repeal)
HB 538 State-Recordation Tax (Exemption)
HB 543 Local-Personal Property Tax (Church buses)
HB 554 State-Sales and Use Tax (Employee Meals)
HB 591 State-Forest Products Tax (Kerf Rule)
HB 616 State-License Tax (Tobacco)
HB 647 Local-Real Property Tax (Use-Value)
HB 668 State-General (Erroneous Assessment)
HB 678 State-Recordation Tax (Writ)
HB 696 Local-License Tax/Merchants' Capital Tax
HB 701 State-Sales and Use Tax (Fire or Rescue Squads)
HB 719 Local-Real Property Tax (Fiscal Year)
HB 738 State-Sales and Use Tax (Syringes; Wheelchairs)
HB 742 Local-Coal Road Improvement Tax
HB 745 State-Recordation Tax (Valuation)
HB 787 State-Beer Tax
HB 797 State-Income Tax ($3, 000 Filing)
HB 845 State-Sales and Use Tax (Acceleration Repeal)
HB 873 Local-Real Property Tax (Inundated Land)
HB 939 Local-License Tax (Coin-operated machines)
HB 952 State-Sales and Use Tax (Newspapers)
HB 1148 Local-Real Property Tax (Judicial Sale)
HB 1175 State-Capital (Depreciable property)
HB 1181 Local-Real Property Tax (Use-Value)
HB 1192 State-General (Six-Year Revenues)
HJR 15 Local-Real Property Tax (Constitutional. Amdt.)
HJR 32 Local-Real Property Tax (Study exemptions)
HJR 61 State-Tobacco Tax (Federal Tax)
HJR 64 Local-Real Property Tax (Study rental property)
HJR 127 Local-Real Property Tax (Study rehab. property)
HJR 155 Local-Real Property Tax (Study property tax)
HJR 156 State-Sales and Use Tax (Study vending machines)
HJR 163 Local-General (Study local revenue needs)
HJR 184 State-Income Tax (Study incentives)

Legislative Summaries