Tax Type
Recordation Tax
Description
There is no exemption on deeds of trust recorded by bail bondsmen
Topic
Exemptions
Taxable Transactions
Date Issued
03-27-2007
March 27, 2007
Re: Request for Ruling: Recordation Tax
Dear *****:
This will reply to your letter in which you (the "Taxpayer") seek a ruling as to whether a deed of trust issued to the Commonwealth, as a requirement for bail bondsmen, is subject to the recordation tax.
FACTS
Virginia Code § 9.1-185.5 C 4 states that prior to the issuance of a bail bondsman license, the Department of Criminal Justice Services may require that a bail bondsman "place a deed of trust on the real estate that he is using for the limit of his expected bonded indebtedness to secure the Commonwealth and shall name the attorney for the Commonwealth of the affected locality as trustee under the deed of trust . . . ." The Taxpayer requests a ruling based on the question, "When properties are conveyed to the Commonwealth of Virginia by a deed of trust, or a deed modification to increase the amount of a current deed of trust," is the exemption from recordation tax in Va. Code § 58.1-811 A 3 applicable?
RULING
Virginia Code § 58.1-811 A 3 provides an exemption from the taxes imposed by Va. Code § 58.1-801 for any deed conveying real estate "[t]o the United States, the Commonwealth, or to any county, city, town, district or other political subdivision of the Commonwealth." The exemptions listed under Va. Code § 58.1-811 A apply to deeds conveying property. The Taxpayer in this case is not transferring real property. As such, the exemptions under Va. Code § 58.1-811 A do not apply.
In the situation presented, the Taxpayer is merely securing real estate already owned, as required by the Taxpayer's profession. The tax on such recordings is imposed under Va. Code § 58.1-803. The exemptions listed under Va. Code § 58.1-811 B apply to the recording of deeds of trust and mortgages under Va. Code § 58.1-803. There is no exemption on deeds of trust recorded by bail bondsmen to secure the Commonwealth. As such, the Taxpayer is liable for the recordation tax on the recording the deed of trust.
The Code of Virginia sections cited are available on-line at www.tax.virginia.gov in the Tax Policy Library section of the Department's web site. If you have any questions regarding this ruling, please contact ***** in the Office of Policy and Administration, Appeals and Rulings, at *****.
-
-
-
-
-
-
-
- Sincerely,
Janie E. Bowen
Tax Commissioner -
- Sincerely,
-
-
-
-
-
-
AR/1-901956680B
Rulings of the Tax Commissioner