Tax Type
Recordation Tax
Description
Allocation of recordation tax to various localities
Topic
Local Taxes Discussion
Date Issued
09-18-1987
September 18, 1987
Re: Request for Ruling: Local Recordation Tax:
§§58.1-3800 and 58.1-3801
Dear *****************
This will reply to your letter of August 25, 1987 requesting a ruling on the proper allocation of recordation tax to the various localities.
On or about September 23, 1987 you expect to record a Supplemental Indenture to the mortgage on the property of the ********** covering the issuance of ******** in bonds. The obligation will be secured by *********** property located in numerous Virginia localities as well as property located in two other states.
You have submitted a computation of the state tax under the second paragraph of Va Code §58.1-803 B. For the value of all of the properties in all of the states you used the book value as of July 31, 1987 Because the fair market value of the properties in all of the states is not easily ascertainable, and because use of the book value could result is consistent valuation for all properties and not materially affect the amount of state tax, use of the book value is reasonable and approved for this transaction.
The portion of the obligation secured by property in Virginia is large enough to take advantage of the reduced rates on amounts over *********** set forth in Va Code §58.1-803 E. Accordingly, your Exhibit A (copy enclosed) showing that a state recordation tax of********** will be due appears to be correct
You have also submitted a computation of the amount of tax collectible by each locality which imposes a local recordation tax. This computation allocates ********* (one-third of the total state recordation tax, computed above) among the localities
The amounts shown on your Exhibit B (copy enclosed) as the local recordation tax due to each locality appear to be correct as authorized by Va Code §58.1-3800. However, as you acknowledge in your letter, a city imposing a recordation tax pursuant to its charter, instead of pursuant to Va Code §58.1-3800, may impose a tax that is different from the amount shown on Exhibit B.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner