Tax Type
Property Tax
Description
Machinery and Tools Used in a Manufacturing or Mining Business.
Topic
Property Subject to Tax
Date Issued
03-16-1967
This is to acknowledge receipt of your letter of March 9, 1967, which reads as follows:
- "Section 58-831 of the Code of Virginia provides for the segregation of machinery and tools for local taxation, and § 58-412 of the Code of Virginia provides for the taxing of machinery and tools used in manufacturing or mining.
"Your attention is directed to the fact that the levy imposed upon machinery and tools shall not be higher than tangible personal property. If the county were using 20% of the fair market value of tangible personal property, could they at the same time, use a different formula of 10% of fair market value for machinery and tools? Would this not result in unequal taxation?'
Section 58-412 of the Code, as amended, provides, in part, as follows:
"Machinery and tools used in a manufacturing or mining business taxable on capital under § 58-418 shall not be held to be capital under the preceding section, nor shall such machinery and tools be hereafter assessed as real estate. All such machinery and tools used in a manufacturing or mining business taxable on capital under § 58-418 shall be listed for local taxation exclusively and each city, town and county may make a separate classification for all such machinery and tools and fix the rate of levy thereon, but such rate shall not be higher than the rate imposed upon tangible personal property in such city, town, county or district.'
In my opinion, under the provisions of this statute the city or county may make a separate classification for tax purposes of all machinery and tools used in a manufacturing or mining business and may fix a different rate of levy for tax purposes on such property so long as the rate shall not be higher than any levy imposed on tangible personal property in the area. If the levy should be made in an amount that conforms with this statute, I am also of the opinion that it would not result in prohibitory taxation. Therefore, the first question presented by you is answered in the affirmative, and your second question is answered in the negative.
Attorney General's Opinion