Tax Type
Local Taxes
Property Tax
Description
Machinery and Tools; Horticultural Use
Topic
Local Power to Tax
Local Taxes Discussion
Property Subject to Tax
Date Issued
02-29-1988
[Opinion - Virginia Attorney General: 1988 at 545]
REQUEST BY: Honorable Dorothy O'B. Schaeffer Commissioner of the Revenue for Culpeper County Courthouse Building 135 West Cameron Street Culpeper, Virginia 22701
OPINION BY: Mary Sue Terry, Attorney General
OPINION:
You ask whether the machinery and tools of a greenhouse and landscaping business are farm machinery exempt from personal property taxation under a local ordinance, when the real property of such business qualifies as "real estate devoted to horticultural use" for purposes of special land use assessment.1
I. Applicable Statutes
Section 58.1-3505 of the Code of Virginia, which authorizes localities by ordinance to exempt farm machinery from personal property taxation, provides:
A. Farm animals, grains and other feeds used for the nurture of farm animals, agricultural products, farm machinery and farm implements are hereby defined as separate items of taxation and classified as follows:
8. Farm machinery and farm implements. . . .
B. The governing body of any county, city or town may, by ordinance duly adopted, exempt in whole or in part from taxation, or provide a different rate of tax upon, all or any of the above classes of farm animals, grains and feeds used for the nurture of farm animals, farm machinery, implements or equipment set forth in subsection A.
Localities are authorized by § 58.1-3231 to provide for special land use assessment of property devoted to certain defined uses, such as horticultural use. The phrase "horticulture use" is defined as
real estate devoted to the bona fide production for sale of fruits of all kinds, including grapes, nuts, and berries; vegetables; nursery and floral products under uniform standards prescribed by the Commissioner of Agriculture and Consumer Services; or real estate devoted to and meeting the requirements and qualifications for payments or other compensation pursuant to a soil conservation program under an agreement with an agency of the federal government.
Section 58.1-3230. The introductory language of § 58.1-3230 limits the application of this definition to special land use assessments under Art. 4, Ch. 32 of Tit. 58.1.2
II. Personal Property Tax Statutes and Real Property Tax Statutes Construed Independently of Each Other
Real property tax statutes are found in Ch. 32 of Tit. 58.1. Tangible personal property tax statutes form a separate body of law found in Ch. 35 of Tit. 58.1. Although both chapters deal with taxation of property, each consists of a separate and independent set of statutes governing the taxation of two distinct subjects of taxation. I find no basis upon which to conclude that personal property of a business may be classified as farm machinery solely because the real property of the business is classified as horticultural under the real property statutes.3 Classifications and definitions for purposes of real and personal property taxation must be determined according to the respective governing statutes.4
III. Determination that Personal Property Is Farm Machinery May Not Be Based Solely upon Fact that Real Property Owned by Same Business Is Horticultural
Based on the above, it is my opinion that a determination that machinery and tools of a greenhouse and landscaping business are farm machinery for purposes of personal property taxation may not be based solely upon the fact that real property owned by the business qualifies as "real estate devoted to horticultural use" for purposes of real property taxation.5
1 Special land use assessment is provided for in §§ 58.1-3229 through 58.1-3244 of the Code of Virginia.
2 Section 58.1-3230 provides, in pertinent part: "For the purposes of this article the following special classifications . . . are established and defined. . . ." (Emphasis added.)
3 In an analogous situation, a prior Opinion of this Office concludes that the definition of the term "manufacturer" for purposes of the license tax statutes, § 58.1-3703(B)(4) (formerly § 58-266.1(A)(4)), is not controlled by § 58.1-602(9) (formerly § 58-441.3(p)), in the sales tax statutes. See 1983-1984 Att'y Gen. Ann. Rep. 372.
4 The fact that this conclusion reflects the intent of the General Assembly in this instance is made clear by the introductory language of § 58.1-3230. See supra note 2.
5 This Opinion does not address whether machinery and tools of such a business may be classified as farm machinery based on other factors.
Attorney General's Opinion