Bulletin Number
VTB 86-10
Tax Type
Local Taxes
Description
1986 Legislative Changes Affecting Localities
Topic
Local Power to Tax
Date Issued
06-01-1986
Virginia Tax Bulletin
Virginia Department of Taxation
86-10
DATE: June 1, 1986
SUBJECT: 1986 Legislative Changes Affecting Localities
Powers of the Commissioners of the Revenue
House Bill 481 (Chapter 35) amends § 58.1-3110 by limiting the power of commissioners of the revenue in interrogating summoned taxpayers about the tax liability of other persons by requiring the commissioner to specifically identify in the summons any taxpayer whose tax liability is in question. The commissioners of the revenue now have the power to summon the taxpayer or other persons to appear to answer questions, under oath, touching on the tax liability of any and all taxpayers. The bill requires that "any and all taxpayers" be specifically identified. This requirement is effective July 1, 1986.
Collection of Delinquent Local Taxes
House Bill 494 (Chapter 634) amends § 58.1-3919 to authorize the city or county treasurer or his deputy to appear in district court to prosecute delinquent taxpayers effective July 1, 1986. A 1974 opinion of the Attorney General held that local tax collectors who are not attorneys may not institute or prosecute a suit for the collection of taxes; thus this chapter broadens the ability of local treasurers to collect taxes by distress. House Bill 483 (Chapter 267) amends § 58.1-353 to provide that the procedure also apply to the collection of delinquent individual income tax assessments effective July 1, 1986.
Collection of Delinquent Individual Income Tax
House Bill 483 (Chapter 267) amends § 58.1-353 to provide that the collection of delinquent individual income tax assessments may be enforced by local treasurers by legal process in the manner provided in § 58.1-3919 of the Code of Virginia, effective July 1, 1986.
Local Property Tax Penalty
Senate Bill 82 (Chapter 206) amends § 58.1-3916 to provide that localities that impose a 10 percent penalty for failure to file a local property tax return or to pay a local tax with a minimum penalty of $10.00 may still do so except that the penalty may not exceed the amount of the tax when the tax is less than $10.00. This restriction will be applicable to any return or payment due after June 30, 1986.
A schedule of penalties that may be imposed under this bill is as follows:
Amount of Tax Penalty
$ 0 - $ 10.00 100% of tax
$10 - $100.00 $10
over $100.00 10% of tax
Criminal Penalties for Failure to File Tax Returns
House Bill 468 (Chapter 351) amends § 58.1-3916.1 to provide that any ordinance requiring the filing of a return for local tax purposes may prescribe criminal penalties for willful failure or refusal to file such return timely or for making false statements on such returns with intent to defraud, effective July 1, 1986. Such penalties shall not exceed those for a class 3 misdemeanor if the amount of the tax lawfully assessed in connection with the return is $1,000 or less. The maximum penalty for a class 3 misdemeanor is a fine of up to $500. If such tax is $1,000 or more the penalty shall not exceed that for a class 1 misdemeanor which may be a fine of up to $1,000 and in addition may allow confinement in jail for no more than twelve months.
The penalty is similar to the penalty provided in § 58.1-1814 for failure to file a return for any tax administered by the Department of Taxation.
Reissue of Real Estate Tax Bills
House Bill 501 (Chapter 353) amends § 58.1-3916 to permit the treasurer to invalidate a real estate tax bill sent to a former owner and re-issue a new bill to the new owner when a transfer of real property occurs after January 1 and provides that no penalty for failure to pay such tax shall be imposed if the tax is paid within two weeks after the notice thereof is mailed. The bill also provides that the treasurer shall make the determination as to whether the failure to file a return or to pay a tax was the fault of the taxpayer. The provisions of-this bill are effective July 1, 1986.
The penalties for failure to file returns of tangible personal property, merchant's capital and machinery and tools are assessed by the commissioner of the revenue. This bill allows the treasurer to waive penalties imposed by the commissioner of the revenue as well as the penalties imposed by the treasurer.
Tax Exemption for Rehabilitated Property
House Bill 554 (Chapter 271) amends §§ 58.1-3220 and 3221 to authorize localities to allow exemption for residential or commercial rehabilitated real estate to begin upon the completion date of the rehabilitation or January 1 following the completion date. This amendment is effective July 1, 1986. Prior to the effective date of the bill, the exemption on qualified rehabilitated real estate could begin only on the January 1 following the completion of the rehabilitation.
Flight Simulators
House Bill 744 (Chapter 195) amends § 58.1-3506 by classifying flight simulators as a separate class of tangible personal property, thereby allowing them to be taxed at a different rate from other tangible personal property effective July 1, 1986. Flight simulators are not currently set out separately in the law and therefore are subject to the tax rate on tangible personal property generally. This bill classifies them along with the general classification of aircraft. Localities may adopt a tax rate on this class of property which is no higher than the rate on tangible personal property.
Condominium - Convertible Land
House Bill 189 (Chapter 324) amends §§ 55-79.42, 55-79.61, and 55-79.90 to clarify that convertible or withdrawable real estate shall not be a part of the common element interest of a condominium unit for purposes of local real estate assessment and taxation and specifies that the declarant alone shall be liable for real estate taxes assessed against the convertible land and any improvements thereon. These provisions are effective July 1, 1986.
The other changes made by this bill have no local impact.
Local Coal and Gas Road Improvement Tax
House Bill 289 (Chapter 58) amends § 58.1-3713 to provide that the local coal and gas road improvement tax imposed by a city or county on persons engaging in the business of severing coal or certain gases from the earth may be used to improve any road in the city or county as determined by the locality's governing body and the coal and gas road improvement advisory committee. This bill is in force from the date of its passage, March 14, 1986. As of January 1986, Buchanan, Dickenson, Russell, Tazewell, and Wise counties imposed this tax.
Previously, the tax was restricted for use in improving roads and used in the transportation of coal.
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