Document Number
73-151
Tax Type
General Provisions
Description
1973 Legislative Digest
Topic
Reports
Date Issued
06-01-1973

LEGISLATIVE DIGEST
VIRGINIA DEPARTMENT OF TAXATION
Introduction

The 1973 session of the General Assembly passed a number of bills affecting the Department of Taxation. For each bill, accompanied by its chapter number, we provide a brief explanation. The effective date for each one is June 1, 1973, except when specifically noted.
House Bills

HOUSE BILL NO. 46 (Chapter 3)

Increases the statutory discount allowed tobacco wholesalers for stamping cigarettes from 5 percent of tax value to 2.5 cents per carton, or 10 percent of tax value. The change will become effective on July 1, 1974, and will cause about an $850,000 decline in revenues in each year of the next biennium.

HOUSE BILL NO. 1147 (Chapter 152)

Permits a county with the county manager form of government with a department of assessments to omit the general reassessment every six years.

HOUSE BILL NO. 1165 (Chapter 345)

Permits the subtraction from federal adjusted gross income of the entire amount of any retirement pay received by a judge of the Virginia judiciary even though retire­ment may have occurred prior to July 1, 1970. As of that date the Judicial Retirement System was brought under the control and admini­stration of the Board of Trustees of the Virginia Supplemental Retirement System. The bill is effective for tax year 1972 and thereafter.

HOUSE BILL NO. 1245 (Chapter 241)

Allows a state agency to send its publications to each member of the General Assembly, unless the member requests that the reports not be sent.

HOUSE BILL NO. 1293 (Chapter 467)

Completely revises the procedure for the sale of delinquent tax lands. The present annual tax sale procedure has been eliminated. As a substitute, no action is taken until the third anniversary of the due date of the taxes, at which time the lien is recorded. On December 31 following the third anniver­sary of the due date, the locality may proceed to sell the property. The sale is similar to the (now repealed) procedure for a bill in equity to sell land purchased by the Commonwealth and results in the kind of title that results from a judicial sale. The former owner's right to redeem continues until the date of the sale but is then cut off. All lands purchased by the Commonwealth but not yet sold revert to their former owners to be subject to the new procedure. All proceedings which have began under the old law may be continued until completed.

HOUSE BILL NO. 1329 (Chapter 75)

Strikes out the restriction that prevented the collection of more than one fee if property on the land book were transferred more than once during a calendar year.

HOUSE BILL NO. 1383 (Chapter 93)

Amends § 58-769.8, which contains the procedure for applying for assessment of agricultural or open space land in accordance with its use. Instead of indexing in the deed book index the names of those applying, the clerk is to index them in a separate Land Use Tax Assessment Book. The local governing body is to compensate the clerk at one dollar per appli­cation. The bill has an effective date of March 20, 1973.

HOUSE BILL NO. 1415 (Chapter 496)

Amends the section permitting localities to exempt or defer the property taxes of elderly persons. The bill permits the locality to disregard the first $2,500 rather than the first $1,500 of income earned by relatives other than the spouse of the elderly person.

HOUSE BILL NO. 1421 (Chapter 497)

Reduces the state retail peddler's license to $100 per year from $250 when peddling on foot and $500 when peddling by vehicle, makes each retail peddler's license valid throughout the state and not just in the city or county in which it was granted, and makes the seafood peddler's license $10 throughout the state. The bill also allows any person or organization to sponsor a show or sale in any county or city for a period not exceeding four weeks. It has an effective date of January 1, 1974.

HOUSE BILL NO. 1595 (Chapter 224)

Provides for sales and use tax refunds to construction contractors on property that will be used and consumed in other states in which the property would not be subject to a sales or use tax.

HOUSE BILL NO. 1810 (Chapter 410)

Raises the rate of interest on delinquent taxes from 6 percent to 8 percent.

HOUSE BILL NO. 1828 (Chapter 412)

Provides that motor vehicles and delivery equipment used in a manufacturing, mining, processing or reprocessing, radio or television broadcasting, or the dairy business shall be taxable as tangible personal property at the local level and therefore not subject to state taxation. Prior to this change the property was taxed by the state at the rate of 30 cents per $100 valuation as capital not otherwise taxed. It has an effective date of January 1, 1974.

HOUSE BILL NO. 1857 (Chapter 522) G

Gives authority to the governing body of any county or city to levy a local license tax on any person engaged in the business of severing coal or gas from the earth. The tax cannot exceed one half of one percent of gross receipts.

Senate Bills

SENATE BILL NO. 582 (Chapter 444)

Changes the section authorizing localities to impose a service charge on tax exempt property, in several respects:
    • 1. The service charge can only be imposed on property listed in § 58-12(1) (owned by the Commonwealth or its political subdivisions), (3) (cemeteries), (4) (libraries and institutions of learning), (6) (lodges), (8) (Colonial Williamsburg) and (10) - (17) (The Virginia Home, Hopkins House, Waterford Foundation, Historic Fredericksburg, community swimming pools or centers, Clark County Historical Associations, Westmoreland Davis Foundation and Women's Home, Inc.), and in sections following 58-12: § 58-12.2 (volunteer rescue squads), § 58-12.3 (boys and girls clubs), § 58-12.4 (Garden Club of Virginia), and those set out in Senate Bill 924 (Chapter 438) (see attached resume of that bill). It cannot be imposed on church schools or parish
      houses or on public roadways or rights-of-way.
    • 2. The amount of the charge is to be based on the expenditures of the preceding year for police and fire protection and garbage disposal, but the amount of state or federal grants specifically allocated to these purposes must be subtracted.
    • 3. United States property must be excluded from the total assessed fair market value of the real estate in the locality for purposes of computing the formula.
    • 4. The commissioner of the revenue or other assessing officer is the person responsible for finding the property and putting it on the land book.
    • 5. When exempt property is valued for purposes of determining the service charge, artistic and historical significance cannot be considered.
    • 6. Any person aggrieved by the assessment may apply for correction to the assessing officer or to the court.

The effective date for the bill is January 1, 1974.

SENATE BILL NO. 598 (Chapter 198)

Makes the following revisions:
    • 1. Removes the limitation on the allocation of the standard deduction. Prior to this amendment the standard deduction on low income allowance could be allocated, but neither spouse could claim an amount exceeding one-half of the deductions. With the amendment the standard deduction or low income allowance may be allocated between the husband and wife as they may mutually agree (in the same manner that itemized deductions and credit for exemptions are allocated.)
    • 2. Provides that state income taxes claimed as a deduction on the fiduciary's federal return shall be an addition on the state return to federal taxable income. Prior to this amendment the Virginia law did not require this modification.
    • 3. Repeals § 58-151.032(d) and § 58-151.032:1(e). Prior to their repeal, corporations and individuals were permitted to report the net amount of dividends received from foreign corporations where a foreign tax credit was allowed on the federal return.
    • 4. Grants authority to the Department of Taxation and the commissioners of the revenue to require a taxpayer to provide a copy of the federal return or any supporting schedules, statements, or inventories.
The bill has an effective date of January 1, 1973.

SENATE BILL NO. 599 (Chapter 279)

Permits an employers' returns and payments of withheld taxes for the months of March, June, September, and December to be made on or before the last day of the following month rather than on or before the 20th day of the following month. The effective date for the bill is February 1, 1973.

SENATE BILL NO. 600 (Chapter 280)

Permits applications to a court for correction of erroneous assessments for all taxes administered by the Department of Taxation. The section also requires that the department be given 21 days notice of the hearing. The change is effective retroactively to July 1, 1972.

SENATE BILL NO. 601 (Chapter 446)

Makes a number of revisions in the administrative procedures of the Department of Taxation. They include allowing the State Tax Commissioner to settle doubtful and disputed claims for taxes of doubtful collectibility and paying interest of .5 percent per month on tax overpayment with the interest accruing from a date ninety days after payment or ninety days after the last day prescribed by law for such payment.

SENATE BILL NO. 602 (Chapter 139)

Corrects an error in the original drafting of § 58-55.1 and clarifies the language of the section on the treatment of a permanent loan deed of trust or mortgage, which follows a consideration loan deed of trust. The change is consistent with the present policy of the department in applying the recordation tax.

SENATE BILL NO. 603 (Chapter 140)

Provides the procedure to be used for relief from local property taxes because of disasters. The bill requires a taxpayer to apply to the commissioner of the revenue within one year of the loss. The commissioner will then determine the amount by which the assessment should be reduced, and if the tax has not yet been paid, exonerate the applicant by that amount. If the tax has been paid, he should certify to the treasurer the amount to be refunded.

SENATE BILL NO. 605 (Chapter 282)

Makes a number of changes in the inheritance and gift tax laws:
    • 1. Provides that the tax be imposed on the valuation of the estate as of the date of death of the decedent unless the estate is subject to federal estate taxes and unless an election has been made by the executor to have the gross estate valued as of a date subsequent to the decedent's death under § 2032 of the Internal Revenue Code for purposes of federal taxation, in which case the alternate valuation date must be used for Virginia tax purposes.
    • 2. States that if the personal representative of an estate has elected to use an alternate valuation date for an estate, then the alternate valuations will be used in determining the proper credit for property previously taxed rather than the date of death valuations.
    • 3. Requires that personal representatives who must file a federal estate tax return report to the Department of Taxation the results of the final audit of the Internal Revenue Service within ninety days from receipt of the audit by the personal representative.
    • 4. Requires that the donor report to the Department of Taxation the result of the final audit of the federal gift tax return within ninety days after the report is received by the donor from the Internal Revenue Service.
    • 5. States that if the personal representative elected alternate valuations for federal estate tax purposes, the alternate valuations shall be used for computing future interests if it is desired to pay the tax on the future interests at the same time that the tax is paid on the life estate.
    • 6. Requires that the assessment of inheritance or gift taxes be made within three years after the return has been filed unless false or fraudulent return is filed.
    • 7. Provides that if the taxpayer or personal representative reports any change of correction in the valuation of a gift or inheritance, any assessment of gift or inheritance tax related to such change may be made within one year after such report is filed.
    • 8. Allows the Department of Taxation to assess a percentage of the federal estate death tax credit for nonresident decedents if such a percentage yields a greater tax than that imposed by § 58-193.
    • 9. Changes the time after which the Department of Taxation can bring an action to recover taxes from one year to nine months from the date of death of the decedent.

The bill is effective for estates of those dying and gifts made on and after July 1, 1973.

SENATE BILL NO. 625 (Chapter 269)

Eliminates interest at the rate of .5 percent per month upon sales and use tax 5 percent to 25 percent graduated penalties prior to assessment.

SENATE BILL NO. 681 (Chapter 274)

Relates only to counties with the county manager plan. The bill relieves any such county that has appointed a Department of Real Estate Assessments from the necessity of undertaking a general reassessment every six years but permits the governing body of any such county to request the circuit court to direct a general assessment at any time that it thinks one is necessary (see also House Bill 1147).

SENATE BILL NO. 698 (Chapter 200)

Increases the excise tax on peanuts from two cents to five cents per one hundred pounds. The change could increase these special fund revenues by as much as $50,000 annually.

SENATE BILL NO. 703 (Chapter 433)

Permits a city, county, or town to impose up to a 2 percent transient tax on hotels, motels, and boarding houses.

SENATE BILL NO. 775 (Chapter 313)

Defines the "production" area of exemption to manufacturers and defines the term "used directly" as it relates to the "production" exemptions under the sales and use tax.

SENATE BILL NO. 829 (Chapter 536)

Empowers a city, county, or town operating an airport or airport authority to impose a boarding fee up to $3.

SENATE BILL NO. 830 (Chapter 321)

Amends § 58-847 to permit a locality providing for installment payments of taxes to charge interest on delinquent installments from the month after the due date of the installment. Formerly, interest could only accrue from January first of the next year. Senate Bill No. 850 (Chapter 325) amends the same section to permit a locality with a July 1 to June 30 fiscal year to collect interest and penalties on a quarterly basis starting with the first installment.

SENATE BILL NO. 848 (Chapter 323)

Provides that a carryover deduction of a net operating loss resulting from the two 1972 disasters will not be added back to Virginia taxable income. This amendment, in effect, provides all fiscal year taxpayers the same deduction for losses sustained from the 1972 disasters that the law before amend­ment provided calendar year taxpayers. The bill is effective retro­actively to January 1, 1972.

SENATE BILL NO. 867 (Chapter 207)

Includes mobile homes in the definition of motor vehicles subject to the 2 percent motor vehicle sales and use tax and requires that every owner of a mobile home apply for and obtain a title from the Division of Motor Vehicles within thirty days from the purchase date or the date that the mobile home was brought into Virginia.

SENATE BILL NO. 876 (Chapter 458)

Makes the following changes in the individual income tax:
    • 1. Allows the surviving spouse of a person retired from civilian service for the federal government, or any agency thereof, to exclude the first $1,000 of retirement benefits.
    • 2. Permits the surviving spouse of a person retired from the service of the armed forces of the United States to exclude the first $1,000 of retirement benefits but limits the exclusion to persons who have attained the age of 60 before the close of the taxable year.
    • 3. Provides that taxpayers age 65 or over may exclude that part of the first $2,000 of retirement benefits exceeding the total social security received during the taxable year. This would include retirement benefits from any source.

4. Allows taxpayers age 65 and over a $1,000 exemption in addition to the $600 personal exemption. This change, in effect, restores to taxpayers age 65 and over the total amount of exemptions allowable prior to the conformity legislation.
    For administrative purposes these revisions are effective for the entire tax year 1973. The estimated decline in revenue caused by these changes is $1.5 to $3 million annually.

    SENATE BILL NO. 891 (Chapter 210)

    Requires the assessing officer of every locality to notify any landowner whenever there is a reassessment of his property. The notice must set out a time and place at which objections may be presented, and must be sent at least 15 days before the time set.

    SENATE BILL NO. 895 (Chapter 211)

    Permits a locality that makes assessments on landowners for improvements such as sidewalks and sewers to allow postponement of payment by persons over sixty-five in low income brackets until the sale of the property or death of the last owner who is over sixty-five.
    SENATE BILL NO. 924 (Chapter 924)

    Makes the property of the following organizations tax exempt as long as the organizations are run on a nonprofit basis and as long as the property is used for charitable, benevolent, historical, public park and playground, or other exempt purposes:

    § 58-12.5 - Auxiliaries of Veterans of World War I
    § 58-12.7 - The Ashland War Memorial Association
    § 58-12.8 - The Lovettsville Game Protective Association
    § 58-12.9 - S.P.C.A.'s
    § 58-12.10 - The Children's Theatre of Richmond
    § 58-12.11 - The Vinson Hall Corp.
    § 58-12.12 - The Historic Hopewell Foundation
    § 58-12.13 - The George Mason University Foundation
    § 58-12.14 - Washington House, owned by the Temple Foundation
    § 58-12.15 - Glenwood Race Course
    § 58-12.16 - Fellowship Square Foundation
    § 58-12.18 - The Chesapeake Bay Foundation
    § 58-12.19 - Potomac Appalachian Trail Club

    SENATE BILL NO. 925 (Chapter 336)

    Exempts from recordation taxes deeds of gifts and leases conveying real estate to The Nature Conservancy or to any agency of the United States Government for the purposes of preserving wilderness, natural, and open areas. It has an effective date of March 15, 1973.

    Legislative Summaries

    Last Updated 08/25/2014 16:44