Tax Type
Local Taxes
Property Tax
Description
Frederick County; County and district levies; Motor carrier transportation property
Topic
Local Power to Tax
Local Taxes Discussion
Rate of Tax
Date Issued
01-09-1995
You ask whether the Frederick County taxing practice of assessing a personal property tax on motor transportation property at the rate of $4.25 per $100 of assessed value, a tax rate greater than that utilized for either the state rolling stock tax under §§ 58.1-2652 and 58.1-2658 or the local machinery and tools tax under § 58.1-3507 of the Code of Virginia, contravenes § 11503a(b)(3), a portion of the Interstate Commerce Act, as revised by § 31(a)(1) of the Motor Carrier Act of 1980.
You relate that Frederick County (the "County') assesses the cab and chassis of all tractor-trailer trucks using the Hunter-McLean Truck Blue Book, and assesses the trailer of all tractor-trailers by the percentage of original cost method. The County applies the county personal property tax rate of $4.25 per $100 to the assessed value of both the vehicles. When a motor carrier property taxpayer provides evidence to the County that such vehicles are subject to personal property taxes in any other state(s), the personal property tax on the vehicles is apportioned according to the requirements of the Virginia Code.1 The County machinery and tools tax rate is $2 per $100 of assessed value and the state rolling stock tax rate is $1 per $100 of assessed value.
It is a general rule of statutory construction that words in a statute are to be given their usual, commonly understood meaning. See Op. Va. Att'y Gen.: 1985-1986 at 65, 66; 1984-1985 at 14, 15; id. at 449, 450. When the language of a statute is clear and unambiguous, rules of statutory construction are not required. Ambrogi v. Koontz, 224 Va. 381, 297 S.E.2d 660 (1982).
"The plain meaning of Section 31 [current § 11503a] is to prohibit discrimination against motor carrier transportation property vis-a-vis other commercial and industrial property generally.' Arkansas-Best Freight System, Inc. v. Cochran, 546 F. Supp. 904, 910 (M.D. Tenn. 1981). The district court found in Cochran that "much, indeed most, of the property within the § 31 definition of `commercial and industrial property' [was improperly] taxed by the State of Tennessee at a rate much lower than that assessed on motor carrier transportation property.' Id.
The definition in § 11503a(a)(4) of "commercial and industrial property' as property "devoted to a commercial or industrial use' is broad and encompassing. Tangible personal property classified as "machinery and tools' under § 58.1-3507(A) appears to be encompassed within the definition of "commercial and industrial property' in § 11503a(a)(4).2 Given the broad definition in § 11503a(a)(4), property classified as "machinery and tools' likely would be encompassed within the definition of "commercial and industrial property.' The County personal property tax rate applied to the motor carrier property is higher than the machinery and tools tax rate for property that would be encompassed within the § 11503a(a)(4) definition of "commercial and industrial property.' It is my opinion, therefore, that the taxation of property classified as machinery and tools, which is encompassed within the broad definition of "commercial and industrial property' contained in § 11503a(a)(4), at the rate of $2 per $100 of assessed value while taxing motor carrier tractors and trailers at the rate of $4.25 per $100 of assessed value violates the provisions of § 11503a(b)(3).
Section 58.1-2652(A) provides for the imposition of "[t]he state tax on the rolling stock of a railroad, a freight car company and a certificated motor vehicle carrier, doing business in this Commonwealth.' Taxpayers that are certificated motor vehicle carriers are subject to the state rolling stock tax rate of $1 per $100 of assessed value and, pursuant to § 58.1-2658, are not subject to local property taxes. Since the rolling stock tax rate does not exceed the rate applied to "commercial and industrial property,' that tax rate does not violate § 11503a(b)(3).
1 A prior opinion of the Attorney General concludes that "[t]o satisfy the `subject to taxation on an apportioned basis' requirement of § 58.1-3511(B), the common carrrier need show only that the property in question has a tax situs in another jurisdiction as well as in Virginia.' 1987-1988 Op. Va. Att'y Gen. 578, 587 (§ 58.1-3511(B) does not require proof of actual apportioned assessment of taxes or payment of such taxes in another state).
2 A prior opinion of the Attorney General defines "machinery' as "a complex combination of mechanical parts,' and "tool' as "an instrument of manual operation, that is, an instrument to be used and managed by the hand instead of being moved and controlled by machinery.' 1987-1988 Op. Va. Att'y Gen. 590, 591 (Department of Taxation interprets phrase "machinery and tools used in a manufacturing business' to include machinery and tools that are necessary in particular manufacturing business and are used in connection with operation of machinery actually and directly used in manufacturing process).
Attorney General's Opinion