Tax Type
Local Taxes
Property Tax
Description
Refund Resulting from Proration of Personal Property Tax
Topic
Collection of Tax
Payment and Refund
Property Subject to Tax
Date Issued
04-29-1988
[Opinion - Virginia Attorney General: 1988 at 598]
REQUEST BY: Honorable L. Carlyle Ford Commissioner of the Revenue for James City County P.O. Box 283 Williamsburg, Virginia 23187-0283
OPINION BY: Mary Sue Terry, Attorney General
OPINION:
Your inquiry concerns refunds due to a taxpayer under a proration of personal property tax ordinance authorized by § 58.1-3516 of the Code of Virginia (effective January 1, 1988).
I. Facts
A taxpayer owned car A on January 1 and was assessed personal property taxes on car A for twelve months. The taxpayer paid the assessment on car A in full. On September 1, the taxpayer purchased car B and received a supplemental personal property tax assessment. Prior to paying the supplemental bill, the taxpayer informed the commissioner of the revenue that car A was sold on September 14. You ask whether the refund due on car A may be given in the form of a credit on a memorandum of corrected assessment for car B, thereby reducing the personal property tax due on car B.
II. Applicable Statute
Section 58.1-3516(A) permits certain localities, including your jurisdiction, to enact an ordinance for the proration of personal property tax. It states, in pertinent part:
Such ordinance shall also provide for relief from tax and a refund of the appropriate amount of tax already paid, which shall be prorated on a monthly basis, where any motor vehicle . . . loses its situs within such locality after the tax day or after the day on which it acquires a situs (hereafter 'situs day'). When any person sells or otherwise transfers title to a motor vehicle . . . with a situs in the locality after the tax day or situs day, the tax shall be relieved, prorated on a monthly basis, and the appropriate amount of tax already paid shall be refunded or credited, at the option of the taxpayer, against the tax due on any motor vehicle . . . owned by the taxpayer during the same tax year. . . . [Emphasis added.]
III. Taxpayer May Choose Credit or Refund of Taxes Already Paid Under Proration Ordinance
Section 58.1-3516(A) mandates that the local ordinance authorizing proration of personal property tax provide a choice for the taxpayer for repayment of taxes already paid on a motor vehicle which loses its situs within the taxing jurisdiction after January 1. The taxpayer must be given the option of a refund or a credit to be applied against any tax due on any motor vehicle owned by taxpayer during the same tax year.
IV. Credit May Be Given on Tax Due on New Vehicle at Taxpayer's Option
Based on the above, it is my opinion that the taxpayer may elect to receive a refund of a portion of the tax previously paid on car A or, alternatively, receive a credit against the tax due on car B. If the taxpayer chooses the credit, it is further my opinion that this credit may be reflected by a memorandum of corrected assessment.
Attorney General's Opinion