Tax Type
Recordation Tax
Description
Grantor's Tax
Topic
Collection of Tax
Date Issued
01-04-1989
January 4, 1989
Re: Request For Ruling; Recordation Tax
Dear*****************
This is in response to your letter of November 9, 1988, requesting a ruling on the proper method of collecting state and local recordation taxes when a document must be recorded in more than one locality. The general rule has been that all state recordation taxes imposed by Chapter 8 of Title 58.1 (§58.1-800 et seq.) of the Code of Virginia must be collected by the first locality in which the document is recorded. The local recordation tax imposed by a local ordinance authorized by §58.1-3800 et seq. has always been prorated; that is, each locality collected its own tax.
Confusion arose under prior law because the grantor's tax imposed by §58.1-802 was a state tax, but one-half was retained by the locality. Under prior law, the first locality collected the entire grantor's tax including both the state and local portion. If the deed conveyed land in more than one locality, the first locality then had to distribute some of the local portion of the tax to the other localities entitled to share in it.
The 1988 General Assembly amended §58.1-802 to provide that the local portion of the grantor's tax would also be prorated. Thus, under current law, the first locality must collect all state taxes, including the state portion of the grantor's tax, while all local taxes and the local portion of the grantor's tax are prorated.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner