Tax Type
General Provisions
Description
1979 Legislative Digest
Topic
Reports
Date Issued
07-01-1979
1979
Legislative Digest
Virginia Department of Taxation
Research Division
Department of Taxation
P.O. Box 6-L Richmond, Va. 23282
July, 1979
CONTENTS
INTRODUCTION
STATE TAXES
General
Bank Stock Tax
Capital Not Otherwise Taxed
Estate Tax
Generation-Skipping Transfer Tax
Gift Tax
Income Tax
License Taxes
Recordation Taxes
Sales and Use Tax
Slaughter Hog and Feeder Pig Excise Tax
Soft Drink Excise Tax
LOCAL TAXES
General
Consumer Utility Tax
License Tax
Merchants' Capital Tax
Personal Property Tax
Real Property Tax
Recordation Tax
INDEX OF BILLS AND RESOLUTIONS
INTRODUCTION
This digest is published by the Department of Taxation as a convenient reference guide to bills affecting state and local taxation that were enacted by the 1979 Session of the General Assembly. It is not intended as a definitive interpretation of the law, but should be useful to state and local officials as well as citizens in understanding the enactments. With regards to state taxation, the enactments summarized here are only those affecting taxes administered by this department. Other state taxes such as corporate franchise or gross receipts or gasoline taxes are not dealt with here.
The digest is organized in two parts: state taxes and local taxes. Within each part the specific tax subjects are arranged alphabetically with the bills beneath them in numerical order. Senate bills and resolutions appear first, followed by House bills and resolutions. An index of bills and resolutions appears at the end of the digest.
STATE TAXES
GENERAL
SENATE BILL NO. 862 (Chapter 380)
This act establishes a joint subcommittee of the General Laws Committees of the House and Senate to study the regulations of state agencies, their effect, and the procedures by which they are adopted. The subcommittee will consider various methods and the desirability of reviewing agency regulations. The subcommittee will report to the 1980 Session.
HOUSE BILL NO. 1380 (Chapter 133)
This act amends § 58-44.2 to require that any person responsible for collecting any tax administered by the Department of Taxation or the Division of Motor Vehicles who overcollects such tax and fails to account for and pay such overcollection to the appropriate state agency by the time his regular monthly or quarterly return is due, shall be liable for the amount of such overcollection and a penalty of 25 percent of such overcollection. The act is effective July 1, 1979.
SENATE JOINT RESOLUTION NO. 160
This resolution establishes a joint subcommittee of the Finance and Appropriations Committees of the House and the Finance and Privileges and Elections Committees of the Senate to study the necessity for imposing, either by statute or by Constitutional amendment, tax limitations and expenditure restrictions at either the state or local level. The subcommittee is to report by November 1, 1979. (This resolution is identical to House Joint Resolution No. 297, also agreed to at the 1979 Session.)
HOUSE JOINT RESOLUTION NO. 276
This resolution establishes a joint subcommittee of the Finance and Health, Welfare and Institutions Committees of the House and the Finance and Rehabilitation and Social Services Committees of the Senate to study the feasibility and practicality of granting tax or other incentives to stimulate private investment by business firms in neighborhood assistance, job training, education, crime prevention, and community services programs. The subcommittee is to report by December 1, 1979.
HOUSE JOINT RESOLUTION NO. 297
Identical to SJR 160 above.
HOUSE JOINT RESOLUTION NO. 324
This resolution establishes a joint subcommittee of the House Committees on Finance and on Corporations, Insurance, and Banking and the Senate Committees on Finance and on Commerce and Labor to study the taxation of publicly regulated telephone companies and private services providing telephone services and equipment to the general public and determine whether the total tax structure applicable to these companies is equitable. The subcommittee is to report by November 1, 1979.
HOUSE JOINT RESOLUTION NO. 342
This resolution establishes a joint subcommittee of members of the Finance Committees of the House and Senate, members of the State Law Revision Task Force, members of the Bar, and the State Tax Commissioner to study the tax procedures of the state, focusing especially on the study and recommendations published December 18, 1978, by a task force of the Virginia State Bar and Bar Association. The subcommittee is to report by December 1, 1979.
BANK STOCK TAX
HOUSE BILL NO. 1822 (Chapter 690)
This act amends § 58-1118.1, the general refund statute for taxes administered by the department, to provide a specific procedure for refunding the state and local bank stock tax. It provides that if within three years from the bank stock tax deadline, an amended bank stock tax return is filed with the department, and simultaneous copies are filed with the local commissioner of the revenue where a local bank stock tax was paid, then the department and locality may reassess and refund the tax. If the department or the locality denies the refund, or refuses to act within three months, then the shareholders will have two more years in which to file suits against the state and three years against the various localities.
The act further provides that an amended bank stock return for tax year 1976 that is filed after March 1, 1979, but on or before June 1, 1979, will be deemed to have been filed on March 1, 1979. The act contains an emergency clause and is effective March 31, 1979.
HOUSE BILL NO. 1941 (Chapter 693)
This act adds in Title 58 a chapter numbered 10.1, titled the "Bank Franchise Tax," consisting of §§ 58-485.1 through 58-485.20, and repeals Chapter 10 of Title 58, consisting of §§ 58-465 through 58-485, all sections relating to the taxation of banks and trust companies.
The act imposes a new tax on Virginia chartered or federal chartered banks, bank associations or trust companies and repeals the present bank stock tax. There are suits pending in Virginia concerning the constitutionality of the Virginia bank stock tax. Suits were filed following a 1978 decision of the Montana Supreme Court that held that the Montana bank stock tax, which is very similar to Virginia's, was unconstitutionally levied on U.S. government obligations.
In the event that the present treatment of U.S. government obligations under the bank stock tax is declared unconstitutional by the final determination of a court which determination is not subject to appeal to a higher court, this act will maintain the taxable base by creating a franchise tax which is permitted by law to include government obligations, and will place the tax on the bank instead of the shareholders.
In jurisdictions where refunds are granted due to the determination of unconstitutionality, the rate will be increased from $1 to $8 per $100 of net worth to allow the state and localities to refund revenues and interest thereon for the appropriate years and not lose revenues. One dollar will apply to the bank franchise tax due in the year in which this act is effective. The rate will return to $1 per $100 of net worth when the $8 rate has sufficiently recouped for the state and localities the amounts paid in refunds.
HOUSE BILL NO. 1942 (Chapter 694)
This act amends § 58-1140 essentially to allow banks two extra years in which to file bank stock tax refund applications in court for the 1976 tax years. It provides that a bank stock tax refund application filed in court prior to December 31, 1980, but after December 31, 1978, will be deemed to have been filed on December 31, 1978. The act is effective July 1, 1980.
HOUSE JOINT RESOLUTION NO. 302
This resolution establishes a joint subcommittee composed of members of the Finance Committees of the House and Senate, as well as two members to be appointed by the Governor to represent the localities and the banks, and one ex-officio member, the State Tax Commissioner. The subcommittee is to study the Virginia bank stock tax structure and the applicability of the decision of the Montana Supreme Court and any theory of exemption of federal obligations under statute or otherwise, and to consider alternative forms of bank taxation. The subcommittee is to report by November 15, 1979.
CAPITAL NOT OTHERWISE TAXED
SENATE BILL NO. 812 (Chapter 560)
This act amends § 58-411 to exclude from the state tax on capital not otherwise taxed, intercompany advances (i.e., loans on open account or evidenced by notes, bonds, pledges or other instruments of indebtedness) from corporations in an affiliated group to other members of the same affiliated group. (The act specifically does not exempt, however, intercompany advances incurred in the usual course of business.) The act is effective January 1, 1980.
HOUSE BILL NO. 1477 (Chapter 569)
This act amends § 58-411 to exempt refunds or receivables of state or federal income taxes from property subject to the state tax on capital not otherwise taxed. The act is effective July 1, 1979.
ESTATE TAX
SENATE BILL NO. 799 (Chapter 559)
This act amends §§ 58-61, 58-238.19,. 64.1-160, 64.1-161, and the third enactment of Chapter 838 of the 1978 Acts; adds a new § 58-238.37; and repeals § 58-238.13, all relating to the administration of the new Virginia Estate Tax and to the collection of all remaining taxes due under the present gift tax law for gifts made before January 1, 1980.
The act ensures collection of gift taxes due to transfers made before January 1, 1980. It also provides for a Virginia "pick-up" tax for generation-skipping transfers under the new estate tax, similar to the present generation-skipping pick-up under the inheritance tax. The act also removes two reporting requirements from the clerks of court. Deeds of gift will not be reported to the department except for transfers made before January 1, 1980. Probates of wills and administrations of estates of decedents dying on or after January 1, 1980, will not be reported to the department. The act also makes minor technical amendments to the provisions in Title 64.1 concerning apportionment of taxes among beneficiaries. The act is effective for estates of decedents dying on or after January 1, 1980.
HOUSE BILL NO. 1376 (Chapter 157)
This act amends § 58-238.9 to replace the automatic lien provisions for all estates under the new Virginia Estate Tax Act, effective January 1, 1980, with a provision for a discretionary lien on residents' estates and an automatic lien on nonresidents' estates only. The act is effective January 1, 1980.
GENERATION-SKIPPING TRANSFER TAX
SENATE BILL NO. 799 (Chapter 559)
See ESTATE TAX.
GIFT TAX
SENATE BILL NO. 799 (Chapter 559)
See ESTATE TAX.
INCOME TAX
SENATE BILL NO. 702 (Chapter 423)
This act adds a new § 58-151.13:1 to provide that if a check tendered for payment of the state income withholding tax is not paid by the bank, the person by whom the check was tendered will be liable for the payment. If the payment is not made within five days after the Commissioner has given him written notice, the person by whom the check was tendered will be guilty of a Class 4 misdemeanor. The act is effective July 1, 1979.
SENATE BILL NO. 703 (Chapter 32)
This act amends § 58-151.050:1 to provide (1) that to qualify for the special one-factor apportionment formula for financial corporations, a corporation must derive more than 70 percent of its gross income from classes of income such as financial service fees, commissions, interest, etc., rather than the present 50 percent, and (2) that in determining the 70 percent qualification level, all such income must be included without reference to the state wherein it is earned. The act is effective for taxable years beginning with January 1, 1979.
SENATE BILL NO. 704 (Chapter 33)
This act amends § 58-151.26 to make optional, rather than mandatory, the procedure whereby the county and city treasurers send quarterly notices to taxpayers prior to the due date for installment payments on estimated income taxes. For taxable 1979 and thereafter, estimated taxpayers will be receiving a packet of tax forms which will include the declaration and quarterly payment vouchers. This eliminates the necessity for quarterly notices. The act is effective July 1, 1979.
SENATE BILL NO. 742 (Chapter 596)
This act amends § 58-151.013 to extend to all eligible taxpayers, whether they itemize deductions or not, the individual income tax deduction for child and dependent care expenses. The act is effective for taxable years beginning with January 1, 1979. (This replaces the 1978 deduction allowed only to those who itemize.)
SENATE BILL NO. 941 (Chapter 639)
This act adds new §§ 58-151.0105 and 58-151.0106 to enable the State Tax Commissioner to make an emergency assessment of income taxes jeopardized by delay for any previous year open to the department. "Jeopardized by delay" means that a taxpayer designs to depart quickly from the state, remove his property from the state, conceal himself or his property, or do any act tending to prejudice or render ineffectual proceedings to collect income tax for the period in question.
The act further allows the Commissioner to terminate a current income tax year at any time and make an assessment as of that date. The act equips the state with a procedure for perfecting an income tax lien in an emergency situation that is comparable to the procedure of IRS. The act contains an emergency clause and is effective March 31, 1979.
HOUSE BILL NO. 1442 (Chapter 404)
This act amends § 58-151.02 to clarify that a Virginia domiciliary who simply removes his abode to another state or foreign country remains subject to the Virginia income tax unless he can show conclusive evidence of a change of domicile to another state or foreign country. The act also cites some examples of factors that may be considered by the department in determining domicile. The act is effective for taxable years beginning on and after January 1, 1979.
HOUSE BILL NO. 1463 (Chapter 371)
This act amends §§ 58-151.032, 58-151.035 and 58-151.050:3 to require that the
revenue car mile method be used for apportioning the income of multistate railroad companies to Virginia for corporate income tax purposes, and to provide credits against their income taxes for taxable years beginning with 1980 of one half their income tax liability, the total of such credits not to exceed one half the franchise tax paid by the railroad company for tax year 1979.
The 1978 Session had enacted Senate Bill No. 456 (Chapter 784) to bring Virginia into compliance with the federal Railroad Revitalization and Regulatory Reform Act of 1976. The 1978 act repealed the gross receipts tax on railroads and imposed instead the corporate income tax, with a proviso that the 1979 Session would enact the appropriate method of apportioning the income of railroads. This act determines that method by requiring the calculation of the ratio of Virginia loaded car miles to total loaded car miles of the company. The apportionment provision is effective with the 1979 taxable year; the credit provision is effective with the 1980 taxable year.
HOUSE BILL NO. 1692 (Chapter 226)
This act amends §§ 58-151.013, 58-151.032:1 and 58-151.032:2 to allow a subtraction from federal adjusted gross income for individuals, or federal taxable income for corporations, for wages and salaries eligible for the federal Targeted Jobs Tax Credit, which replaced the New Jobs Tax Credit that expired with 1978. The act is effective beginning with taxable year 1979.
LICENSE TAXES
SENATE BILL NO. 631 (Chapter 223)
This act amends § 58-381.1 to permit the sponsor of a nonprofit antique, art or craft show and sale to conduct any number of shows and sales for one year for a state license tax of $30. It permits the same to the sponsor of such shows and sales for profit, for a tax of $200. The act is effective July 1, 1979.
RECORDATION TAXES
HOUSE BILL NO. 1360 (Chapter 566)
This act amends § 58-61 to provide that no additional recordation tax maybe levied to record a notice of assignment of a deed of trust or mortgage if made within three years of the recordation of the original deed. The act is effective July 1, 1979.
HOUSE BILL NO. 1643 (Chapter 238)
This act amends § 56-90.1 relating to jointly owned electric utility assets. Concerning taxation, it provides that no state recordation tax is due upon recordation of any instrument which conveys an undivided fractional interest or secures any bonds or obligations of an association of electric cooperatives, cities or towns. However, any local recordation taxes are payable as though the state taxes had been collected. No state franchise tax or local license tax can be collected on the proceeds of the sale of an undivided fractional interest. The act is effective July 1, 1979.
SALES AND USE TAX
SENATE BILL NO. 551 (Chapter 555)
This act amends § 58-441.6 to exempt from sales and use tax agricultural supplies purchased by farmers for use in producing worms for market. The act is effective July 1, 1979.
SENATE BILL NO. 556 (Chapter 556)
This act amends § 58-441.3 to exempt from sales and use tax separately stated charges for alterations to apparel, clothing and garments made with the sale. (Present law only exempts alterations made apart from the sale, which are therefore considered a nontaxable service.) The act is effective July 1, 1979.
SENATE BILL NO. 679 (Chapter 557)
This act amends § 58-441.6 to extend the sales and use tax exemption to paper furnished to a printer for fabrication into catalogs and other printed materials used in advertising tangible personal property for sale when stored for 12 months or less in this state and distributed for use outside this state. (The exemption already exists for the catalogs and other printed materials used in advertising and the envelopes, containers and labels used for packaging and mailing them.) The act is effective July 1, 1979.
SENATE BILL NO. 727 (Chapter 198)
This act amends § 58-441.18 to require that sales tax collected by a dealer is held in trust for the Commonwealth. The act is effective July 1, 1979.
SENATE BILL NO. 729 (Chapter 558)
This act amends § 58-441.6 to exempt from sales and use tax the official flags of the United States, Virginia, or any locality, when sold by a government agency. The act also exempts certain publications sold by the State Board of Elections. The act is effective July 1, 1979.
SENATE BILL NO. 899 (Chapter 561)
This act amends § 58-441.6 to extend the sales and use tax exemption for hearing aids to those sold by "hearing aid dealers and fitters." (The exemption already applies to hearing aids sold on prescriptions or work orders of physicians and audiologists.) The act is effective July 1, 1979.
SENATE BILL NO. 917 (Chapter 562)
This act amends § 58-441.6 to exempt from sales and use tax all tangible personal property, except structural construction materials, to be affixed to real property when purchased by a farmer for use in agricultural production for market.
SENATE JOINT RESOLUTION NO. 180
This resolution establishes a joint subcommittee of the Finance Committees of the House and Senate to study the various taxes paid by consumers for gas, electricity, coal, fuel oil and other energy sources used for heating to insure that the taxes paid by all such users are fair and equitable. The subcommittee will report by November 1, 1979.
HOUSE BILL NO. 566 (Chapter 564)
This act amends § 58-441.6 to exempt from the sales and use tax tangible personal property purchased by churches organized not for profit, to be used in religious worship services and religious educational materials purchased by churches for use in their regular schools of religious education. To be eligible for the exemption, a church must show that it is exempt from income taxation under Internal Revenue Code § 501(c)(3) or that its real property is exempt from local taxation under § 58-12 of the Code of Virginia. The act is effective January 1, 1980.
HOUSE BILL NO. 1225 (Chapter 205)
This act amends § 58-441.6 to extend the sales and use tax exemption to certain homes for adults operated not for profit that adjoin a licensed nursing home by means of a covered walkway and have an identical board of directors as the nursing home. The act is effective July 1, 1979.
HOUSE BILL NO. 1760 (Chapter 572)
This act amends § 58-441.6 to exempt from the sales and use tax books and other reading materials for use by nonprofit organizations organized solely to distribute such books and reading materials to school age children. The act is effective July 1, 1979.
HOUSE BILL NO. 1790 (Chapter 573)
This act amends § 58-441.12 to require out-of-state dealers to register for collection and payment of Virginia use tax on sales of tangible personal property to Virginia customers when he advertises in newspapers or other periodicals printed and published in Virginia, or on billboards or posters in Virginia, or through materials distributed in Virginia by means other than the U.S. Mail; also requires registration by an out-of-state dealer who makes regular deliveries, more than twelve times per year, of tangible personal property within Virginia by means other than common carrier. The act is effective July 1, 1979.
HOUSE BILL NO. 1836 (Chapter 575)
This act amends § 58-441.6 to exempt from sales and use tax machinery, tools, repair parts, fuel, power, energy or supplies, cereal grains and other feed ingredients, supplements or additives used directly in making feed for sale or resale. The act is effective July 1, 1979. The act states that the provisions of the act are prospective only and will not affect any litigation currently before the courts.
HOUSE BILL NO. 1978 (Chapter 148)
This act amends § 58-441.6 to allow an exemption from the sales and use tax for wheelchairs and parts, braces, crutches, prosthetic devices, and orthopedic appliances, whether or not purchased by a prescription, when purchased by an individual for use by such individual. (Present law already exempts these articles when purchased by prescription.) The act also extends the exemption to catheters-and urinary accessories. The act is effective July 1, 1979.
HOUSE JOINT RESOLUTION NO. 194
This resolution directs the Finance Committees of the House and Senate to jointly study all practical means of replacing revenues lost to the state and localities if the sales tax on food for home consumption only is repealed. The study is to be completed prior to the 1980 Session.
SLAUGHTER HOG AND FEEDER PIG EXCISE TAX
HOUSE BILL NO. 1765 (Chapter 72)
This act amends §§ 3.1-763.7 and 3.1-763.9 and repeals § 3.1-763.13 to increase the special fund excise tax on slaughter hogs and feeder pigs sold in Virginia from five cents to ten cents on slaughter hogs and from two cents to five cents on feeder pigs. The processor is responsible for collecting this tax and paying it into the State Treasury to the credit of the Virginia Pork Industry Fund. The act also repeals the effective date provision of the original act establishing the fund in 1966. The act is effective July 1, 1979.
SOFT DRINK EXCISE TAX
HOUSE BILL NO. 1623 (Chapter 134)
This act amends § 58-404.02 to revise the rate schedule for the soft drink excise tax in order to better proportion the revenues to the General Fund collected from the soft drink industry for supporting the state's litter control program. The tax is imposed on every wholesaler or distributor of carbonated soft drinks based on the total gross receipts from soft drinks at the following rates:
$ 0 - $100,000 $ 50
100,001 - 250,000 100
- 250,001 - 500,000 250
1,000,001 - 3 million 1,500
3,000,001 - 5 million 3,000
5,000,001 - 10 million 4,500
10,000,001 - and over 6,000
The act is effective with taxable year 1979.
LOCAL TAXES
GENERAL
SENATE BILL NO. 890 (Chapter 733)
This act amends § 58-958.1 to allow local governing bodies to permit by ordinance payment of local levies by use of a credit card. The locality may add to the payment of a local levy by credit card a service charge not to exceed four percent or the percentage charged to the locality. The act is effective July 1, 1979.
HOUSE BILL NO. 1575 (Chapter 240)
This act amends §§ 58-978, 58-979, and 58-991 to provide local governing bodies with additional means to collect all delinquent local taxes, other than real estate, such as the consumer utility tax. Present law requires the treasurer to make out delinquency lists on only those subjects segregated for local taxation exclusively and authorizes supplemental collection assistance by a collector or attorney on only those tax subjects. This act requires the treasurer to make out delinquency lists on all local taxes and extends the authority of the governing body to appoint a collector for any local taxes, other than real estate, delinquent for two months. The act is effective July 1, 1979.
HOUSE BILL NO. 1594 (Chapter 259)
This act amends § 58-961 to require that, unless otherwise provided by local ordinance, the treasurer must credit any payment of local levies first against the most delinquent local account, the collection of which is not subject to a defense of a statute of limitation. The act is effective July 1, 1979.
HOUSE BILL NO. 1621 (Chapter 517)
This act amends § 58-1152.1 to change to local option the present law's requirement that a refund be granted if any tax is declared unconstitutional by a court of competent jurisdiction. (The requirement was placed on localities at the 1978 Session.) In addition, the act removes the previous statute of limitation on refunds of taxes due to a determination of a constitutional issue. The act is effective July 1, 1979.
CONSUMER UTILITY TAX
SENATE JOINT RESOLUTION NO. 180
See STATE TAXES - SALES AND USE
LICENSE TAX
HOUSE BILL NO. 1341 (Chapter 565)
This act amends § 58-266.1 to exempt from local license tax or other local taxes based on or measured by gross receipts, any amounts received by a member, subsidiary or affiliated association of an agricultural cooperative association for management, accounting, or administrative services provided to other members of the same group under a nonprofit cost-sharing agreement. The exemption does not apply to receipts from outside the group. The act is effective for taxable years beginning on and after January 1, 1979.
HOUSE BILL NO. 1437 (Chapter 568)
This act amends § 58-266.1 to clarify the legislation (House Bill No. 696 - Chapter 817) enacted at the 1978 Session modifying the structure of the local business, professional, and occupational license taxes. Specifically, the act requires that a locality lower any rates on categories above the maximum limits for any tax year after 1982, if it receives more revenue in tax year 1981 or any tax year thereafter than the revenue base for that year. (The revenue base for tax year 1981 is the revenue collected from the license tax in tax year 1980 plus one-third of any increase in such revenue between tax year 1980 and tax year 1981. The revenue base for each tax year after 1981 is the revenue base of the preceding tax year plus one-third of the increase in the revenues of the subsequent tax year over the revenue base of the preceding tax year.)
The rates are to be adjusted as follows: the revenues of those categories with rates at or below the maximum shall be subtracted from the revenue base for such year. The resulting amount is to be allocated to the categories with rates above the maximum in a manner to be determined by the locality, and divided by the gross receipts of such category for the tax year. The resulting rates will be applicable to such categories for the second tax year following the year whose revenue was used to make the calculation. The act is effective July 1, 1979; however, the mandatory adjustments in the rates to offset an increase in license tax collections will not occur until tax year 1983.
HOUSE BILL NO. 1718 (Chapter 570)
This act amends § 58-266.1 to add "persons constructing for their own account for sale" to the contracting category, taxed at 16 cents per $100 of gross receipts, for purposes of calculating their local business, professional, and occupational license tax. (This act essentially moves the speculative builder from the "other" category, taxed at 36 cents per $100 of gross receipts.) The act is effective for tax years beginning on or after July 1, 1979.
MERCHANTS' CAPITAL TAX
HOUSE BILL NO. 1756 (Chapter 571)
This act amends § 58-835 to authorize a locality to permit a taxpayer to base his merchants' capital tax on the average amount of capital employed in his business on the tax date of January 1 (or July 1 for certain localities) and on the preceding August 1. The act is effective July 1, 1979.
PERSONAL PROPERTY TAX
HOUSE BILL NO. 1438 (Chapter 351)
This act amends § 58-831.01 to classify energy conversion equipment as a separate item of property for local taxation and to authorize localities to levy a tax on such property at a different rate than on other property; however, such rate and ratio cannot be greater than that on machinery and tools. "Energy conversion equipment" means any generating equipment purchased after December 31, 1974, for the purpose of changing the energy source of a manufacturing plant from oil or natural gas to coal, wood, wood bark, wood residue, or any other alternative energy source for use in manufacturing and any co-generation equipment purchased on or after such date to achieve more efficient use of any energy source. The act is effective for tax years beginning on and after July 1, 1979. See also HJR 213 below.
HOUSE BILL NO. 1735 (Chapter 185)
This act amends § 46.1-65 to authorize any locality to require that satisfactory evidence must be given that any delinquent motor vehicle, trailer, or semi trailer personal property taxes owed by the applicant have been paid before a local vehicle license may be issued. The act is effective July 1, 1979.
HOUSE BILL NO. 1905 (Chapter 576)
This act amends §§ 58-33.1, 58-829, 58-829.1:1, 58-829.5, 58-835, 58-836, 58-851 and 58-851.7; adds § 58-829.6 and 58-829.7; and repeals § 58-829.2, all sections relating to assessment and taxation of personal property.
The act requires that the department provide a basic course of instruction for assessing offices to insure the equitable assessment of personal property.
The act restates in a more concise form the categories of tangible personal property as they exist for valuation purposes.
The act also classifies as a separate item of taxation and allows a different tax rate on all aircraft other than aircraft with a maximum seating capacity of 36 which are owned and operated under certificates of public convenience by the SCC or the federal CAB, and aircraft other than the aircraft that are taxed as capital under § 58-405 et seq.
The act provides that, any locality that taxes personal property on a proportional monthly or quarterly basis shall provide for a refund or credit of personal property tax for any portion of a tax year that the personal property was subject to taxation by another jurisdiction.
The act provides that localities may use their own local personal property tax form rather than one furnished by the department. The act is effective July 1, 1979.
HOUSE JOINT RESOLUTION NO. 52 (Chapter 739)
This act proposes an amendment to § 6(b) of Article X of the Constitution of Virginia to permit "personal property designed for continuous habitation," i.e., mobile homes used as permanent residences, to be eligible property for tax relief for the elderly and the permanently disabled. The resolution must be agreed to again by the 1980 Session and then may be submitted to the electorate in a referendum.
HOUSE JOINT RESOLUTION NO. 213 (Chapter 740)
This act proposes an amendment to § 6(i) of Article X of the Constitution of Virginia to allow the General Assembly to permit localities to exempt or partially exempt from taxation any generating equipment installed after December 31, 1974, for the purpose of converting from oil or natural gas to coal, wood, wood bark, wood residue, or to any other alternate energy source for manufacturing, and to exempt any co-generation equipment installed since December 31, 1974, for use in manufacturing. The resolution must be agreed to again by the 1980 Session and then may be submitted to the electorate in a referendum. See also House Bill No. 1438 above.
REAL PROPERTY TAX
SENATE BILL NO. 618 (Chapter 632)
This act amends § 58-769.8, relating to use-value assessment of land devoted to agricultural, horticultural, forest, or open-space use, to require that, unless provided differently by local ordinance, no application for use-value assessment will be approved if the tax on the land is delinquent. The application will be considered only after delinquent taxes, interest, and penalties are paid. The act is effective July 1, 1979.
HOUSE BILL NO. 960 (Chapter 543)
This act amends § 58-760.1 to allow localities that implement a combination program of exemption and deferral of real estate tax for elderly or handicapped taxpayers to increase the total combined income limitation to $15,000 if they defer the tax on an eligible person whose total combined income exceeds $12,000. The act also provides that interest may be charged when real estate tax is deferred, the annual interest rate not exceeding 8 percent. The act is effective July 1, 1979.
HOUSE BILL NO. 1344 (Chapter 152)
This act amends § 58-769.11 to remove the director of the Division of State Planning and Community Affairs from membership on the State Land Evaluation Advisory Committee, the committee charged with suggesting use-values to localities which assess on the basis of agricultural, horticultural, forest or open space use. (The division was abolished in 1977.) The act is effective July 1, 1979.
HOUSE BILL NO. 1387 (Chapter 544)
This act amends § 58-760.1 to provide that a local ordinance for tax relief for the elderly may provide that a change in ownership to a surviving spouse less than 65 years old, due to the death of the qualified spouse, will result in a prorated exemption or deferral for the then eligible year. The act also provides that the annual deadline for filing for tax relief for the elderly or disabled is May 1 or any other date set by ordinance, except that the deadline cannot be earlier than February 1. The act is effective July 1, 1979. (See also House Bill 1955 below.)
HOUSE BILL NO. 1389 (Chapter 545)
This act amends § 58-760.1 to provide that in lieu of the required annual affidavit for persons claiming an exemption or deferral of taxes under local tax relief for the elderly or handicapped, the local ordinance may permit the filing of the affidavit on a three-year cycle. The optional procedure would include an annual certification from the claimant that no information on the last affidavit has changed his qualification for relief. The act is effective July 1, 1979.
HOUSE BILL NO. 1461 (Chapter 337)
This act amends § 58-16.2:1 to authorize any locality to impose a service charge on real estate exempt from taxation by international law or by any treaty, international agreement or statute under the U.S. Constitution. The act is effective for taxable years beginning on and after July 1, 1979.
HOUSE BILL NO. 1547 (Chapter 473)
This act amends § 58-785.1 to provide that no locality, as a result of an annual assessment or general reassessment, may increase its total real estate tax collection by more than one percent unless a public hearing is held and the governing body finds that an increased tax rate is necessary. The act also clarifies that the tax derived from the construction of new or other improvements to the property is not to be included in the calculation. The act also stipulates very specific requirements concerning publication of the notice of increase in tax collections over one percent. Also, the act provides that the tax rate for taxes due on or before June 30 may be fixed on or before April 15. The act is effective July 1, 1979.
HOUSE BILL NO. 1607 (Chapter 431)
This act amends §§ 15.1-262, 15.1-376.1 and 15.1-847 and adds new §§ 15.1491.01, 33.1-183.1 and 58-773.2 to provide for the sale or lease of airspace by localities and by the Commission of Highways and Transportation, to provide for the application of zoning laws to such airspace, and to provide for the separate assessment of air rights when owned by someone other than the owner of the surface land. The act is effective July 1, 1979.
HOUSE BILL NO. 1626 (Chapter 179)
This act amends § 58-769.10 to require that the interest rate on roll-back taxes assessed by a locality due to change in use of real estate assessed under use-value taxation shall be the same interest rate applicable to delinquent taxes in the locality. The act is effective July 1, 1979.
HOUSE BILL NO. 1627 (Chapter 180)
This act amends § 58-769.8 to provide that, retroactive to the 1977 tax year, no new application for use-value assessment is required when the change in acreage occurred solely as a result of governmental action or condemnation. The act is effective for tax years beginning with 1977.
HOUSE BILL NO. 1834 (Chapter 574)
This act amends § 58-778 to allow any county having a population of 40,000 or less and assessing at 100 percent of fair market value, upon majority vote of its board of supervisors, to opt for a return to the six-year cycle for general assessments of real property. The act is effective July 1, 1979.
HOUSE BILL NO. 1901 (Chapter 156)
This act amends § 58-795.2 to impose a penalty on those localities that fail to comply with the requirement for assessment of real estate at 100 percent of fair market value as required by § 58-760. Any locality whose assessment / sales ratio as determined by the department's ratio study falls below 80 percent for the year a general or annual reassessment is effective shall be guilty of failure to comply and will have withheld from it its share of the net profits of the operation of the alcoholic beverage control system. This money, minus a penalty of 8 percent per year, will be returned to the locality when compliance has been effected. The act is effective July 1, 1981.
HOUSE BILL NO. 1955 (Chapter 563)
This act amends § 58-760.1 to allow local property tax relief for the elderly when the dwelling is jointly owned by persons either of which is 65 or older. It also moves back a month the three-month period during which an affidavit certifying an individual as permanently and totally disabled must be filed. Rather than February 1 to May 1, the act requires a January 1 to April 1 filing period, unless local ordinance provides for a later deadline. The act is effective July 1, 1979. (See also House Bill 1387 above.)
HOUSE BILL NO. 1960 (Chapter 359)
This act amends § 58-758.1 to change the formula for the assessment of leasehold interests in real property that is exempt from taxation to its owner. It provides for assessment to the lessee by capitalizing the net annual fair market rent for such leasehold. The discount rate component of the capitalization rate is the Federal Reserve discount rate for the tax day. However, if the lease permits the lessee to acquire the real property for a nominal sum at the completion of the term, such leasehold interest will be assessed as if the lessee were the owner. The act is effective for taxes assessed as of July 1, 1980, and thereafter.
HOUSE BILL NO. 1961 (Chapter 577)
This act amends §§ 58-33.1, 58-769.2, 58-769.3, 58-776 through 58-776.4, 58-778, 58-786, 58-787, 58-789, 58-792.02, 58-895, 58-897 through 58-899 and 58-913; adds a new § 58-898.1; and repeals §§ 58-895.1 and 58-896. The act provides for a general restructuring of the laws governing general reassessments of real estate, local boards of assessors, and local boards of equalization.
It provides that instruction in assessing real estate be provided by the department to members and prospective members of boards of assessors and boards of equalization. The act requires that in order to be eligible for appointment, each prospective member of a board of equalization must attend and participate in the department's basic course in assessing real estate.
The act also provides the option that a local governing body may provide for biennial assessments by the commissioner of the revenue. If, however, the commissioner will not consent to making an annual or biennial assessment as is the governing body's wish, the governing body may appoint a professional assessor, not necessarily full-time, certified by the department, in lieu of appointing a board of assessors. If the locality elects not to appoint a board of assessors, whether in addition to a professional assessor or not, it must ask that a board of equalization be appointed.
The act also provides that, in lieu of a board of assessors, general reassessments in counties and cities may be conducted by a professional assessor certified by the department. If the locality elects not to appoint a board of assessors, it must ask for a board of equalization to be appointed.
The act provides that a board of equalization may be appointed by the circuit court in any year that a majority vote of a city council so requests. Aboard of equalization must be appointed in each tax year following a general reassessment or annual or biennial assessment, unless such assessment is made by a board of assessors.
The act authorizes counties or cities that conduct annual or biennial assessments to create a permanent board of equalization.
The act also limits the time that property appraisal cards or sheets must be open for public inspection. This information is not required to be open until after the official assessment is filed in the clerk's office. The act is effective July 1, 1979.
HOUSE BILL NO. 1977 (Chapter 377)
This act amends §§ 15.1-1508, 15.1-1509, 15.1-1511, 15.1-1512 and 15.1-1513 of the Agricultural and Forestal Districts Act. The act provides that no land may be added to such a district without the consent of the owner; that no application for a district shall be for less than 500 acres and that the governing body may not reduce the district to less than 500 acres; and that noncontiguous land may be included in a district if it is within one mile of the contiguous land in the district.
Also, the act requires that the local governing body refer the application for a district to the planning commission. Finally, the act clarifies that use-value assessment and taxation must be extended to qualifying land in a district, whether or not a local use-value plan or use-value assessment ordinance has been adopted by the locality. The act is effective July 1, 1979.
HOUSE BILL NO. 1986 (Chapter 195)
This act amends §§ 58-760.2 and 58-760.3 and repeals §§ 58-759.1 and 58-759.2 to allow a locality to provide a partial exemption from taxation for real estate that has been substantially rehabilitated for residential use or for commercial or industrial use. The act requires that the exemption for rehabilitated residential property must be equal to the increase in the assessed value resulting from the rehabilitation. The exemption for rehabilitated commercial/ industrial property must not exceed the increase in assessed value resulting from the rehabilitation. The exemption may be granted for no longer than ten years. Real estate for residential use is "substantially rehabilitated" when it is at least 25 years old and is improved to increase the assessed value by at least 40 percent. Real estate for commercial/ industrial use is "substantially rehabilitated" when it is at least 25 years old and is improved to increase the assessed value by at least 60 percent. The governing body may require such buildings to be older than these specified ages, may require a greater increase percentage in assessed value, and may place other restrictions and conditions on eligibility. The act is effective January 1, 1980.
HOUSE BILL NO. 2004 (Chapter 160)
This act amends §§ 58-512.1, 58-514.2:2 and 58-760 and adds a new § 58514.2:3 to permit land and non-carrier and non-utility property of public service corporations to be assessed at the same level as similar locally assessed real estate, that is, by application of the local stated ratio and at the tax rate applicable to other real property. The act is effective for tax years beginning with January 1, 1980.
HOUSE JOINT RESOLUTION NO. 226
This resolution continues the joint subcommittee of the Finance Committees of the House and Senate, appointed in accordance with House Joint Resolution No. 64 of the 1978 Session, to study the taxation of real rental property. The subcommittee is to report by November 1, 1979.
HOUSE JOINT RESOLUTION NO. 227
This resolution continues the joint subcommittee of the Finance Committee of the House and Senate, appointed in accordance with House Joint Resolution No. 32 of the 1978 Session, to study the entire subject of property tax exemptions for charitable purposes. The subcommittee is to report by December 1, 1980.
LOCAL RECORDATION TAXES
HOUSE BILL NO. 1643 (Chapter 238)
See STATE TAXES - RECORDATION
HOUSE BILL NO. 1360 (Chapter 566)
See STATE TAXES - RECORDATION
INDEX OF BILLS AND RESOLUTIONS
SENATE BILL OR JOINT RESOLUTION NO.
SB 551 State-Sales and Use (Worms)
SB 556 State-Sales and Use (Alterations)
SB 618 Local-Real Property (Use-Value)
SB 631 State-License (Shows and Sales)
SB 679 State-Sales and Use (Catalogs)
SB 702 State-Income (Bad Checks)
SB 703 State-Income (Financial Corporations)
SB 704 State-Income (Estimated)
SB 727 State-Sales and Use (Trust)
SB 729 State-Sales and Use (Flags)
SB 742 State-Income (Dependent Care)
SB 799 State-Estate, Gift, and Generation-Skipping
SB 812 State-Capital (Intercompany)
SB 862 State-General (Agency Regs.)
SB 890 Local-General (Credit Card)
SB 899 State-Sales and Use (Hearing Aid Dealers)
SB 917 State-Sales and Use (Farmer's Property)
SB 941 State-Income (Emergency Assessment)
SJR 160 State-General (Tax Limitation)
SJR 180 State-Sales and Use, Consumer Utility (Fuel)
HOUSE BILL OR JOINT RESOLUTION NO.
HB 566 State-Sales and Use (Churches)
HB 960 Local-Real Property (Elderly Relief)
HB 1225 State-Sales and Use (Homes for Adults)
HB 1341 Local-License (Services Within Co-Op)
HB 1344 Local-Real Property (Use-Value)
HB 1360 State-Recordation (Deed)
HB 1376 State-Estate (Liens)
HB 1380 State-General (Overcollection)
HB 1387 Local-Real Property (Elderly Relief)
HB 1389 Local-Real Property (Elderly Relief)
HB 1437 Local-License (Ceilings)
HB 1438 Local-Personal Property (Energy Conversion)
HB 1442 State-Income (Domicile)
HB 1461 Local-Real Property (Internat'l Treaty)
HB 1463 State-Income (Railroads)
HB 1477 State-Capital (Exempts Tax Refunds)
HB 1547 Local-Real Property (Limits Increase)
HB 1575 Local-General (Delinquencies)
HB 1594 Local-General (Payments)
HB 1607 Local-Real Property (Airspace)
HB 1621 Local-General (Unconstitutional Tax)
HB 1623 State-Soft Drink Excise
HB 1626 Local-Real Property (Use-Value)
HB 1627 Local-Real Property (Use-Value)
HB 1643 State-Recordation (Electric Utility)
HB 1692 State-Income (Jobs Tax Credit)
HB 1718 Local-License (Speculative Builders)
HB 1735 Local-Personal Property (Motor Vehicles)
HB 1756 Local-Merchants' Capital (Average)
HB 1760 State-Sales and Use (Children's Books)
HB 1765 State-Slaughter Hog and Feeder Pig
HB 1790 State-Sales and Use (Out-of-State)
HB 1822 State-Bank Stock (Refunds)
HB 1834 Local-Real Property (Six-Year)
HB 1836 State-Sales and Use (Feed Production)
HB 1901 Local-Real Property (ABC Profits)
HB 1905 Local-Personal Property (Assessment)
HB 1941 State-Bank Stock (Repeal)
HB 1942 State-Bank Stock (Suits)
HB 1955 Local-Real Property (Elderly Relief)
HB 1960 Local-Real Property (Leasehold)
HB 1961 Local-Real Property (Assessment)
HB 1977 Local-Real Property (Ag. District)
HB 1978 State-Sales and Use (Wheelchairs)
HB 1986 Local-Real Property (Rehabilitated)
HB 2004 Local-Real Property (Utility Assessment)
HJR 52 Local-Personal Property (Mobile Homes)
HJR 194 State-Sales and Use (Food)
HJR 213 Local-Personal Property (Energy Conversion)
HJR 226 Local-Real Property (Rental)
HJR 227 Local-Real Property (Exemption)
HJR 276 State-General (Neighborhood Assistance)
HJR 297 State-General (Tax Limitation)
HJR 302 State-Bank Stock (Study)
HJR 324 State-General (Telephone Companies)
HJR 342 State-General (Tax Procedures)
Legislative Summaries