Bulletin Number
VTB 87-7
Tax Type
Local Taxes
Description
1987 Legislative Changes Affecting Localities
Topic
Local Power to Tax
Local Taxes Discussion
Date Issued
06-01-1987
Virginia Tax Bulletin
Virginia Department of Taxation
87-7
DATE: June 1, 1987 SUBJECT: 1987 Legislative Changes Affecting Localities
Daily Rental Equipment
House Bill 1376 (Chapter 591) and Senate Bill 495 (Chapter 572), which are identical, amend Va. Code § 58.1-3510 to include daily rental equipment in the definition of merchants' capital. The bills define daily rental equipment as all tangible personal property, except trailers and other tangible personal property required to be titled and registered with a state agency, where the possession or use is transferred for a consideration, without the transfer of ownership, for an hourly, daily, weekly or monthly period. The definition specifically excludes rental contracts which exceed 90 days or which are renewed within 30 days after the 90-day period expires.
Rental equipment which does not qualify as daily rental equipment is to be valued pursuant to Va. Code § 58.1-3503(A)(17) .
Effective Date: July 1, 1988.
Filing Local Returns: Waiver of Penalty and Interest; Due Dates
House Bill 1557 (Chapter 595) amends Va. Code § 58.1-3916 by designating the commissioner of the revenue, rather than the treasurer, as the local official to determine whether the penalty and interest for failure to file a local return shall be waived because the failure to file was not the fault of the taxpayer. The local treasurer remains the official to make such determination in case of a penalty for failure to pay a tax. The bill further amends this section to allow the governing body of Spotsylvania County to make such determination rather than the commissioner or the treasurer.
Senate Bill 432 (Chapter 570) makes almost identical amendments to this section.
In addition House Bill 1557 (Chapter 595) and Senate Bill 667 (Chapter 582) both amend Va. Code § 58.1-3916 to allow a county to specify a date for payment of license taxes which coincides with such date in any adjacent jurisdiction.
Effective Date: July 1, 1987.
General Classification of Tangible Personal Property
House Bill 1517 (Chapter 568) amends Va. Code § 58.1-3503 to allow the commissioner of the revenue to assess automobiles by any method which establishes fair market value, if the model and year of the individual automobile are not listed in a recognized pricing guide and a percentage or percentages of original cost do not accurately reflect fair market value. Effective Date: July 1, 1987.
Local License Tax -- Affiliated Nonstock Corporations
House Bill 1369 (Chapter 617) amends Va. Code § 58.1-3703B.10. to expand the exemption from the local license tax to receipts or purchases between affiliated nonstock corporations. "Affiliated group" means one or more chains of includible corporations connected through stock ownership with a common parent corporation. This bill provides that the term "stock" refers to nonstock corporation membership or membership voting rights when one or more of the includible corporations, including the common parent corporation, is a nonstock corporation. Effective Date: July 1, 1987.
Local License Tax -- Coal Severance Tax
House Bill 1459 (Chapter 711) adds Va. Code § 58.1-3713.2 to provide that local coal severance taxes are to be paid to the locality in which the coal is first placed in transit for shipment outside of the jurisdiction imposing the tax. The tax will not be imposed on coal if a coal severance tax or comparable tax has been paid to the locality or state in which it was mined. Effective Date: July 1, 1987.
Local License Tax -- News Publication
House Bill 1395 (Chapter 618) amends Va. Code § 58.1-3703 B.3. to exempt from the local license tax the privilege or right of printing or publishing any newsmagazine, newsletter or other news publication. This expands the existing exemption for the privilege or right of printing or publishing any newspaper. Effective Date: July 1, 1988.
Local License Tax -- Public Service Corporations
House Bill 1456 (Chapter 244) amends Va. Code § 58.1-3731 to eliminate the double taxation of certain public service corporations, by limiting the imposition of the local license tax on the gross receipts of such public service corporations to sales to the ultimate consumer in the locality. Previously, the local license tax was imposed on the gross receipts of the company accruing from business in the locality. Effective Date: July 1, 1987.
Local License Tax -- Taxicab Drivers
House Bill 1495 (Chapter 715) amends Va. Code § 58.1-3703 to exempt from the local license tax a taxicab driver who operates for a taxicab company upon which the locality has imposed a license tax. Effective Date: July 1, 1987.
Powers of the Commissioner of the Revenue
House Bill 1489 (Chapter 377) amends Va. Code § 58.1-3110 to prohibit the commissioner of the revenue from summoning a taxpayer or other person to inquire into the tax liability of the taxpayer which is the subject of litigation. Effective Date: July 1, 1987.
Proration of Tangible Personal Property Taxes
Senate Bill 493 (Chapter 212) amends Va. Code § 58.1-3516 to allow localities which prorate the tangible personal property tax to exclude boats from property subject to proration. Before the amendment, a locality which adopted proration was required to prorate the tax on motor vehicles, trailers and boats. Effective Date: July 1, 1987.
Real Property Tax Relief for the Elderly and Handicapped
Senate Bill 593 (Chapter 525) amends Va. Code § 58.1-3211:
• to increase the allowable income limitation for qualifying for tax relief from $18,000 to $22,000;
• to allow the exclusion from the allowable income limitation of up to $7,500 of permanent disability compensation;
• to increase to $6,500 the amount of income of a relative, not the spouse, living in the dwelling which may be excluded , from the allowable income limitation; and
• to increase the allowable net combined financial worth of the owners and of the spouse of any owner from $65,000 to $75,000.
The bill repeals the authority of the local governing bodies to increase the income limit in localities having a combined program of exemption and deferral, and eliminates the provision that the income limitation may be increased from $18,000 to $19,000 with the exemption or deferral being reduced by the amount that the combined income exceeds $18,000.
The bill also amends Va. Code § 58.1-3215 to allow a locality's ordinance to prorate the exemption or deferral of real estate taxes for a change in ownership resulting from the qualifying owner's sale of such property, and to exclude the sale proceeds from the financial net worth or income computation for the year of the sale. Previously, the exemption was prorated only when the qualifying owner died and the property was transferred to a nonqualifying spouse.
House Bill 1545 (Chapter 546) makes identical amendments to § 58.1-3211 and House Bill 1157 (Chapter 534) makes identical amendments to § 58.1-3215.
Effective Date: July 1, 1987.
Release of Lien on Real Estate
House Bill 1482 (Chapter 245) adds Va. Code § 58.1-3226.1 which allows a local governing body to adopt an ordinance to provide that a delinquent tax lien on a portion of a parcel of real estate which is sold be released upon payment of the taxes, interest and penalties attributable to the portion of real estate sold. Effective Date: July 1, 1987.
Special Assessment for Land Preservation
Senate Bill 429 (Chapter 550) amends Va. Code §§ 58.1-3230, 58.1-3233, 58.1-3239 and 58.1-3240 to add the State Forester to the State Land Evaluation Advisory Council and to the list of agency heads who provide standards and from whom local officials may request an opinion as to whether a real estate parcel qualifies for special use assessment. The bill also substitutes the Department of Forestry for the Department of Conservation and Historic Resources as the agency to prescribe standards for establishing forest areas. Effective Date: July 1, 1987.
Tangible Personal Property Tax Exemption
House Bill 1041 (Chapter 533) amends Va. Code § 58.1-3617 to classify all motor vehicles owned by churches and used predominantly for church purposes as property used by its owner for religious purposes, and thus exempt from local property taxation. This replaces the exemption for vehicles designed for carrying more than ten passengers, owned by churches and used for church purposes. Effective Date: July 1, 1987.
BILLS AFFECTING SPECIFIC LOCALITIES
(Excludes bills which grant specific property tax exemptions and bills allowing creation of primary highway transportation districts)
House Bill 978 (Chapter 233) amends Va. Code § 58.1-3516 to add the City of Danville to the list of localities which may provide by ordinance for the proration of personal property tax on motor vehicles, trailers and boats. Effective Date: July 1, 1987.
House Bill 1182 (Chapter 537) adds Va. Code § 58.1-3919.1 to authorize the treasurer of any county under the county manager plan of government to employ private collection agents to collect delinquent local taxes other than real estate, and provides for the compensation of such services. (Currently this applies only to Arlington County.) Effective Date: July 1, 1987.
House Bill 1221 (Chapter 362) and Senate Bill 378 (Chapter 318) amend Va. Code § 58.1-3274 to authorize the Counties of Accomack and James City to assess real estate annually or biennially. Effective Date: July 1, 1987.
Senate Bill 569 (Chapter 628) amends Va. Code § 58.1-3231 and adds Va. Code § 58.1-3237.1 to authorize Loudoun County to include in its use value assessment ordinance the following additional provisions:
• The governing body may exclude land lying in planned development, industrial or commercial zoning districts from special use assessments.
• The governing body may provide that property will be subject to roll-back taxes at the time the zoning is changed, at the owner's request, to a more extensive use at the time the zoning is changed rather than at the time change in use occurs. Certain owner-operated agricultural activities are exempt from these eligibility and roll-back provisions.
Effective Date: July 1, 1987.
Related Documents
Tax Bulletins