Tax Type
Local Taxes
Property Tax
Description
Property Excluded from Land Use
Topic
Basis of Tax
Local Power to Tax
Local Taxes Discussion
Property Subject to Tax
Date Issued
12-22-1987
[Opinion - Virginia Attorney General: 1987 at 540]
REQUEST BY: Honorable V. Earl Dickinson Member, House of Delegates Rt. 4, Box 560 Mineral, Virginia 23117
OPINION BY: Mary Sue Terry, Attorney General
OPINION:
You ask three questions concerning the special assessment and taxation of agricultural, horticultural, forest, or open-space real estate provided by Art. X, § 2 of the Constitution of Virginia (1971) and Secs. 58.1-3229 through 58.1-3244 of the Code of Virginia. Specifically, you ask whether (1) § 58.1-3237.1 unconstitutionally permits a locality which has adopted a land use ordinance to exclude property in certain zoning districts from such tax treatment; (2) property owners so excluded should be compensated by the locality for the difference between property taxes paid at market value and at land use values while such property remains in an otherwise qualifying land use; and (3) the remaining provisions of § 58.1-3237.1 are constitutional.
I. Applicable Law
Article X, § 2 authorizes the General Assembly to enact general laws to permit local governments to ordain tax deferral or relief on agricultural, horticultural, forest, or open-space land. This exception to the general provision that real estate must be taxed at its fair market value also provides that "(i)n the event the General Assembly defines and classifies real estate for such purposes, it shall prescribe the limits, conditions, and extent of such deferral or relief." Id. (emphasis added).
Section 58.1-3237.11 prescribes the limits, conditions and extent of tax deferral or relief as required by Art. X, § 2. It authorizes any county not organized under the forms of local government in Chs. 13, 14 or 15 of Tit. 15.12 and which is contiguous to a county with the urban executive form of government to add to its land use ordinance provisions to exclude from land use assessment: (1) land lying in planned development, industrial or commercial zoning districts, or (2) land enrolled under a land use ordinance where the zoning of the parcel is changed at the request of the owner or his agent to allow a more intensive nonagricultural use. Property under the second exclusion is subject to roll-back taxes at the time of the zoning change. The second exclusion does not apply to property zoned for agricultural use when rezoning to a more intensive use is complementary to agricultural use, the agricultural use continues, and there is no change in ownership after the rezoning request.
II. Section 58.1-3237.1 Consonant with Authority of General Assembly Granted in Art. X, § 2
In accordance with Art. X, § 2, the General Assembly has defined and classified real estate devoted to agricultural, horticultural, forest, or open-space uses and authorized any county, city, or town which has adopted a land use plan to adopt an ordinance to tax such land at its use value. See §§ 58.1-3229 through 58.1-3244. Article X, § 2 mandates that the General Assembly must then prescribe the limits, conditions, and extent of deferral or relief from taxation based on such land use classifications. § 58.1-3237.1 is consonant with this constitutional mandate because it addresses the limits, conditions and extent of land use assessment and taxation.
III. Section 58.1-3237.1 Constitutional; No Authority or Basis Exists for Payment to Property Owners Excluded from Land Use Assessment
Based on the above, it is my opinion that the § 58.1-3237.1 exclusion from land use assessment and taxation for property located in certain zoning districts is constitutionally permissible because it falls within the General Assembly's duty to prescribe the limits, conditions, and extent of deferral or relief from real estate taxation based on land use provided in Art. X, § 2. For the same reason, it is my opinion that the additional provisions of § 58.1-3237.1 are constitutional.
Property made ineligible for land use assessment and taxation under the provisions of § 58.1-3237.1 is to be assessed at its fair market value. See Art. X, § 2. It is my opinion, therefore, that there is no basis for compensating owners of such property for the difference between property taxes paid at market value and the taxes paid at land use value. Any such payment would effectively make nonuniform the taxes "upon the same class of subjects [3 ] within the territorial limits of the authority levying the tax" in violation of Art. X, § 1.
1 Chapter 628, 1987 Va. Acts 1047.
2 Respectively, those forms of local government are: county executive form and county manager form; county manager plan and county board form; and urban county executive form.
3 The class of subjects in this instance is all real estate not enrolled in the land use taxation program.
Attorney General's Opinion