Bulletin Number
VTB 82-11
Tax Type
Recordation Tax
Description
Recordation Tax: 1982 Legislative Changes
Topic
Reports
Date Issued
07-12-1982
July 12, 1982
Subject: Recordation Tax: 1982 Legislative Changes
The 1982 General Assembly amended several laws affecting recordation taxes, The purpose of this bulletin is to announce those changes.
1. Clarification as to Imposition of Tax: § 58-54.1 was amended to provide that the tax is imposed by this section on the consideration or value of the property sold, exclusive of the value of lien or encumbrance remaining on the property sold regardless of whether such lien is assumed or sold subject to such lien or encumbrance. The effective date of this amendment is July 1, 1982. (Chapter 630, 1982 Acts of Assembly, House Bill 887)
2. Supplemental Deeds of Trust or Mortgages: § 58-55 was amended to provide that in the case of deeds of trust or mortgages which are supplemental to existing deeds of trust upon which the recordation tax has been paid, the basis for the tax is the new money added to the amount of the existing debt secured by such existing deeds of trust or mortgages. This amendment also applies to "wrap around" deeds of trust securing a promissory note evidencing secondary financing, where the face value of the "wrap around" trust includes the value of the outstanding principal balance on a First Note and First Deed of trust upon which a recordation tax has been paid. The supplemental instrument shall include certification as to the existing debt
This section was also amended to provide that where the sole purpose of a deed of trust or mortgage is to refinance or modify an existing debt secured by a deed of trust or mortgage on which the tax has been paid and such subsequent instrument is with the same lender 9 the tax shall be paid only on the addition to the amount of such an existing debt. This amendment also clarifies § 58-60 as to what tax should be imposed on these supplemental instruments. The effective date of this amendment is July 19 1982. (Chapter 630, 1982 Acts of Assembly, House Bill 887)
3. Exemption for Certain Assignments of Leases: § 58-52 was amended to provide that if an assignment of the lessor's interest in a lease, or memorandum thereof, is to provide additional security for an obligation of the lessor on which the tax has been previously paid, or the assignment of the lessor's interest is made to the person who owns the property which is subject to the lease, in which cases there shall be no tax for recording the lessor's assignment of the lease. The amendment also provides that the assignment of the lessee's interest in a lease, or memorandum shall be subject to tax unless provided otherwise in § 58-60. The effective date of this amendment is July 1, 1932. (Chapter 630, 1982 Acts of Assembly, House Bill 387)
4. Rate Limitation on Certain Recorded Leases: § 58-58 was amended to provide that the tax on recording leases of coal and other mineral rights shall not exceed fifty dollars ($50.00). The effective date of this amendment is July 1, 1982. (Chapter 436, 1982 Acts of Assembly, House Bill 653)
5. Exemptions from State Recordation Tax: § 58-64 was amended to exempt from taxes imposed by §§ 58-54 and 58-55 any deed conveying real estate to the United States (Subsection 3); to a subsidiary corporation from its parent corporation or from a subsidiary corporation to a parent corporation when the transaction qualifies for non-recognition of gain or loss under the Internal Revenue Code of 1954, as amended, (subparagraph 8a). This section was also amended by adding Subsection B to exempt from taxes imposed by §§ 58-54 and 58-55 any deed of trust or mortgage given by (1) nonprofit incorporated colleges or other nonprofit incorporated institutions of learning; (2) trustee or trustees of a church or religious body; (3) any nonstock corporation organized exclusively for the purpose of owning and/or operating nonprofit hospitals. The effective date of this amendment is July 1, 1982. (Chapter 630, 1982 Acts of Assembly, House Bill 887)
6. Exemptions for Certain Deeds: § 58-61 was amended to provide that no additional tax shall be assessed for deeds to which a husband and wife are the only parties, when the tax has been paid on the recording of the original deed. In addition, this amendment provides that no tax is due to be paid on a deed of gift between an individual grantor or grantors and individual grantee or grantees, when no consideration has passed between the parties. Any such deed shall state therein that it is a deed of gift. The amendment also deleted from this section the requirement of the clerk to notify the Department of Taxation when recording a deed of gift for a transfer made before January 1, 1980. The effective date of the amendment is July 1, 1982. (Chapter 6519 1982 Acts of Assembly, Senate Bill 239).
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