Tax Type
General Provisions
Description
1983 Legislative Digest
Topic
Reports
Date Issued
06-01-1983
1983
Legislative Digest
VIRGINIA DEPARTMENT OF TAXATION
Department of Taxation
P.O. Box 6-L Richmond, Va. 23282
June, 1983
CONTENTS
INTRODUCTION
STATE TAXES
General
Excise Taxes
Forest Products Tax
Intangible Personal Property
Income Taxes
Recordation Taxes
Probate Taxes
Sales and Use Taxes
LOCAL TAXES
Property Taxes
License Taxes
-
- Transient Occupancy Taxes
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 1983 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 of the General Assembly. With regard 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. In each part the specific tax subjects are arranged with the bills beneath them in numerical order. Senate bills and resolutions appear first, followed by House bills. Chapter numbers for each bill refer to the 1983 Acts of the Assembly. An index of bills and resolutions appears at the end of the digest.
STATE TAXES
GENERAL
SENATE BILL 266 (Chapter 545)
This act amends §§58-19.7, 58-19.17, and 58-19.18 to allow counties, cities, and towns to participate in the Set-off Debt Collection Act beginning with tax refunds issued in 1985. This act permits the Department of Taxation to retain up to 25 percent of the amount collected for localities to offset administrative costs.
HOUSE BILL 276 (Chapter 551)
This act amends §58-48.6 to require that all policy statements issued by the State Tax Commissioner which set forth a position not published prior to July 1, 1980 or substantially expand a position published prior to that date be accompanied by a notice of a proposed regulation. This act is effective July 1, 1983.
HOUSE BILL 590 (Chapter 258)
This act amends §58-19.8 to require all state agencies to submit all delinquent debts for collection pursuant to the Set-off Debt Collection Act. This act is effective July 1, 1983.
EXCISE TAXES
HOUSE BILL 218 (Chapter 177)
This act amends §3.1-657 to raise the excise tax on peanuts to 7.5 cents per one hundred pounds effective July 1, 1983 and ten cents per one hundred pounds effective July 1, 1984.
FOREST PRODUCTS TAX
SENATE BILL 78 (Chapter 109)
This act amends §58-838.8 to increase the flat annual forest products tax to $230 for manufacturers of 300,000 board feet or less of rough lumber and $460 for manufacturers of 300,000 to 500,000 board feet of rough lumber. This act is effective July 1, 1983.
INTANGIBLE PERSONAL PROPERTY
HOUSE BILL 436 (Chapter 555)
This act amends §58-405 to define inventory which is imported or scheduled for export and located in a foreign trade zone as intangible personal property and to exempt such property from state and local taxation. This act is effective July 1, 1983.
INCOME TAXES
SENATE BILL 278 (Chapter 572)
This act amends §§59.1-273, 59.1-279, and 59.1-280 and repeals §59.1-281 to allow towns, as well as cities and counties, to apply for Urban Enterprise Zone designation; to permit designation of part of a census tract or block group; and to allow joint application for designation by two or more adjacent localities. This act provides that credits based on unemployment tax due on employees employed at establishments within the Urban Enterprise Zone shall be applied against the firm's income, franchise, gross receipts or shares tax liability; it provides that the tax credit shall not exceed 100 percent of such tax liability; and it provides that the tax credit for unemployment taxes due may be applied to future tax years within the five year period for which credits are established, if such credits are not usable in the tax year. This act also provides that each shareholder of a Subchapter S corporation is eligible for his proportionate share of the tax credit. This act is effective July 1, 1983.
SENATE BILL 334 (Chapter 561)
This act amends §§58-151.23 and 58-151.40 to increase the percentage of income tax that must be paid throughout the year by means of estimated tax from seventy to eighty percent for individuals and from eighty to ninety percent for corporations. This act is effective January 1, 1984.
SENATE BILL 358 (Chapter 472)
This act amends §58-151.013 to exempt benefits received under Title II of the Social Security Act from the Virginia individual income tax effective July 1, 1983.
HOUSE BILL 373 (Chapter 452)
This act amends §§58-151.013 and 58-151.032 to allow taxpayers to subtract from taxable income the value of usable computers and sophisticated technological equipment donated to and used by school divisions, non-profit private schools and colleges, state supported colleges and technical centers located in Virginia. This act is effective July 1, 1983.
SENATE JOINT RESOLUTION 49
This resolution establishes a joint subcommittee to review and monitor federal legislation and innovative state incentives regarding the concept of urban enterprise zones. The joint subcommittee is to submit its report to the 1984 Session of the General Assembly.
RECORDATION TAXES
HOUSE BILL 215 (Chapter 89)
This act amends §58-58 to exempt recorded leases to the United States, the Commonwealth or a political subdivision thereof from the recordation tax effective July 1, 1983.
HOUSE BILL 403 (Chapter 553)
This act amends §58-55 to clarify that on a "wraparound" deed of trust, where the recordation tax has already been paid on the first deed of trust, the recordation tax to be paid is only on that portion of the obligation secured by the wraparound deed of trust which is in addition to the amount of the existing debt. This act is effective July 1, 1983.
PROBATE TAXES
HOUSE BILL 538 (Chapter 140)
This act amends §58-70 to require that clerks of court, rather than commissioners of accounts, determine whether estates are undervalued for probate tax purposes and collect additional tax due by comparing the value of estates listed on probate tax returns with inventories of such estates. This act clarifies that a personal representative may apply to the Department of Taxation or the local treasurer for refunds of overpayments of state and local tax respectively and deletes the provision requiring the Department of Taxation to certify to clerks any undervaluation of an estate for probate tax purposes. This act is effective July 1, 1983.
SALES AND USE TAXES
SENATE BILL 262 (Chapter 599)
This act amends §58-441.6 to provide an exemption for tangible personal property purchased by a voluntary health organization exempt from taxation under §501 (c) (3) of the Internal Revenue Code and organized exclusively for the purpose of providing direct therapeutic and rehabilitative services, such as speech therapy, physical therapy, and camping and recreational activities, to the children and adults of the Commonwealth regardless of the nature of their disease or socioeconomic position. Purchases of tangible personal property by the Virginia Easter Seal Society, Inc. will be exempt under this act as well as purchases by other- organizations meeting all of the criteria noted above. This act is effective July 1, 1983.
HOUSE BILL 40 (Chapter 384)
This act amends §58-441.6 to provide an exemption for tangible nonmedical personal property purchased by a nonprofit organization organized exclusively for the purpose of providing housing and ancillary assistance for children suffering from leukemia or other oncological diseases, for other ill children and for the families of such children during periods of the medical treatment of such children at Virginia hospitals. Purchases of tangible nonmedical personal property by Ronald McDonald Houses will be exempt under this act as well as purchases by similar organizations. This act is effective July 1, 1983.
HOUSE BILL 320 (Chapter 414)
This act amends §58-441.3 to provide that the determination whether a manufacturing, mining, processing, refining or conversion activity is industrial in nature, and hence exempt from the tax, shall be made without regard to plant size, existence or size of finished product inventory, degree of mechanization, amount of capital investment, number of employees or other factors relating principally to the size of the business. Additionally, this act provides that those operations listed in the Standard Industrial Classification Manual Codes 10-14 and 20-39 shall be deemed to be manufacturers, processors, etc. in the industrial sense. This act is retroactive to September 1, 1966.
HOUSE BILL 417 (Chapter 184)
This act amends §58-441.6 to provide an exemption for tangible personal property purchased for use by a nonprofit, nonstock corporation which receives no financial aid from the Commonwealth or federal governments and is organized exclusively for the purpose of operating, at no charge to the pupils, a combination boarding and day school for the severely physically handicapped children and young adults of the Commonwealth. Purchases of tangible personal property for use by the Community of Hope, Inc. will be exempt under this act as well as purchases by organizations meeting all of the criteria noted above. This act is effective July 1, 1983.
HOUSE BILL 549 (Chapter 100)
This act amends §58-441.6 to provide an exemption for tangible personal property and services purchased by educational institutions which provide "face-to-face" educational experiences in American government to high school and college students. Purchases of tangible personal property and services by Close-Up Foundation and Presidential Classroom for Young Americans will be exempt under this act as well as purchases by similar organizations. This act is effective July 1, 1983.
HOUSE BILL 669 (Chapter 565)
This act amends §58-441.6 to provide an exemption for advertising supplements and other printed matter ultimately distributed with or as part of a newspaper or any other exempt publication. This act is effective July 1, 1984.
HOUSE BILL 846 (Chapter 104)
This act amends §58-441.38 to provide that the State Tax Commissioner shall not examine any person's records beyond the three-year period of limitations unless he has reasonable evidence of fraud or reasonable cause to believe such a person was required to file a return and failed to do so. This act is effective July 1, 1983.
HOUSE BILL 848 (Chapter 557)
This act amends §58-441.6 to provide an exemption for tangible personal property used in the libraries, offices, meeting or counseling rooms, and other rooms in public church buildings used in carrying out the work of the church and related ministries including kindergartens, elementary and secondary schools. This act is effective July 1, 1984.
LOCAL TAXES
PROPERTY TAXES
SENATE BILL 24 (Chapter 544)
This act amends §58-833 and of repeals §58-833.1 to delete the excess bills and accounts receivable over bills and accounts payable from the definition of merchants' capital for purposes of local taxation. This bill is effective July 1, 1983.
SENATE BILL 224 (Chapter 570)
This act amends §§58-503, 58-503.1, 58-510, 58-511, 58-512.1, 58-514, 58-514.1, 58-522, 58-524, 58-525, 58-528, 58-529, 58-530, 58-531, 58-538, 58-539, 58-556, 58-557, 58-558, 58-559, 58-588, 58-590, 58-592, 58-597, 58-668, 58-669, 58-670, 58-672, 58-678, 58-679, 58-681, 58-682, 58-683, 58-685, 58-760, 58-764.1, 58-848, 58-915, and 58-1117.20 and repeals §58-671 to shift the responsibility for real property assessment of railroad and pipeline companies from the State Corporation Commission
to the Department of Taxation effective January 1, 1984.
SENATE BILL 271 (Chapter 161)
This act amends §§58-763, 58-790, 58-792.02, 58-795.2, 58-812, and 58-817.1 to provide that routine maintenance shall not be considered as improvements for assessment purposes and that assessors and appraisers shall make a physical examination of property if requested by the taxpayer. This act also provides that the results of the Department of Taxation's assessment/sales ratio study shall be considered prima facie evidence of noncompliance with the 100 percent assessment mandate. This act is effective July 1 , 1983.
SENATE BILL 274 (Chapter 304)
This act amends §§58-769.15, 58-774.2, 58-776.1, 58-785, 58-786, 58-789, 58-795, 58-895, 58-897, 58-899, 58-903, and 58-915; adds §58-33.4; and repeals §§58-774. 1 , 58-776.4, 58-787, and 58-898 affecting the assessment and taxation of real estate and the appeals process therefor. This act will require (1) the State Tax Commissioner to annually make available a general reassessment procedures manual to every city, county, and appropriate town; (2) each supervisor, assessor, and appraiser conducting reassessments to meet qualifications prescribed by the Department of Taxation for that position; (3) the board of assessors shall be chosen by the local governing body rather than the circuit court; (4) prospective members of boards of assessors must be trained by the Department of Taxation to be eligible for appointment; (5) boards of equalization be appointed by the circuit court in the year following an annual, biennial or general reassessment; (6) the terms of boards of equalization shall be limited to six months following the effective date of assessment; (7) members of boards of assessors shall be ineligible for appointment to the board of equalization; and (8) mineral lands shall be under the jurisdiction of boards of equalization. This act eliminates the authority to convene an equalization board at any time other than the year following an annual, biennial or general reassessment and also eliminates the special equalization board for use-value assessments. This act is effective January 1, 1984.
SENATE BILL 298 (Chapter 270)
This act amends §58-835.1 to allow the counties of James City and Loudoun to prorate personal property taxes on motor vehicles, trailers, and boats. This act is effective July 1 , 1983.
HOUSE BILL 26 (Chapter 273)
This act amends §58-835.1 to allow the City of Falls Church and the County of Albemarle to prorate personal property taxes on motor vehicles, trailers, and boats. This act is effective July 1, 1983.
HOUSE BILL 32 (Chapter 549)
This act amends §58-758.1 to require lessees of Virginia Port Authority real estate, other than public service corporations or nonstock nonprofit corporations, to pay real estate taxes on their leasehold interests. This act is effective July 1, 1983.
HOUSE BILL 246 (Chapter 225)
This act adds a new section 58-834.3 to exempt cargo, merchandise, and equipment in transit from property taxation which is stored, located or housed temporarily in a marine or airport terminal prior to being transported outside of Virginia by vessels or aircraft. This act is effective July 1, 1983.
HOUSE BILL 249 (Chapter 90)
This act amends §58-985 and repeals §58-984 to eliminate the requirement that treasurers report and clerks record the list of delinquent real estate taxes on an annual basis and to require that liens on such real estate be recorded in a book, approved visible card system or computer system approved by the Auditor of Public Accounts. This act is effective July 1, 1983.
HOUSE BILL 353 (Chapter 552)
This act amends §58-405 to include tangible personal property used in cable television within the definition of intangible personal property except machinery and tools, motor vehicles, delivery equipment, trunk and feeder cables, studio equipment, tuners, converters, antennae, and office furniture and equipment of cable television businesses. This act is effective July 1, 1983.
HOUSE BILL 370 (Chapter 610)
This act amends §58-959 to require local treasurers to issue a receipt to every taxpayer who makes payment and allow treasurers to charge not more than two dollars for additional tax receipts. This act is effective July 1, 1983.
HOUSE BILL 463 (Chapter 255)
This act amends §58-1117.7 to require the full reimbursement of the purchase price to the buyer of any land sold for delinquent taxes which was improperly placed on delinquent land books. This act is effective July 1, 1983.
HOUSE BILL 537 (Chapter 498)
This act amends §§58-1001 and 58-1009 to provide that the bona fide purchaser of a motor vehicle shall not be liable to levy or distress for delinquent taxes owed by the former owner unless the purchaser knew that taxes had been specifically assessed against such vehicle. This act is effective July 1 , 1983.
HOUSE BILL 572 (Chapter 556)
This act amends §58-760 to provide that a sale of apartment property shall not be deemed to be for conversion to condominium or cooperative ownership unless overt action which is a prerequisite to conversion by the buyer has taken place within three months from the recordation of the deed. This act is effective July 1, 1983.
HOUSE BILL 648 (Chapter 345)
This act amends §§ 58-1117.1 and 58-1117.10 to provide that the owner of real estate must pay all collection fees incurred by a locality, plus the amount of delinquent tax due, when such real estate is redeemed prior to a judicial sale. This act is effective July 1, 1983.
HOUSE BILL 687 (Chapter 144)
This act adds a section numbered 58-829.9 to establish a separate class of tangible personal property for computer hardware used by data processing businesses in providing services to other nonrelated or nonaffiliated businesses. This act provides that a local governing body may levy a tax on this class of tangible personal property at a different rate than other personal property as long as the tax rate on this class does not exceed the rate applicable to other tangible personal property. This act is effective July 1, 1983.
HOUSE BILL 754 (Chapter 36)
This act amends §58-835.1 to provide that localities need not exempt property taxed in another locality unless such tax was assessed to the same owner. This act is effective July 1, 1983.
HOUSE BILL 858 (Chapter 37)
This act amends §58-1117.1 to provide that the notice of intent to sell real estate for delinquent taxes shall be mailed to the property owner at his last known address and to the property address, if different, at least thirty days prior to instituting action to sell. This act is effective July 1, 1983.
LICENSE TAXES
HOUSE BILL 20 (Chapter 383)
This act amends §15.1-37.3:2 to increase the maximum regulatory fee from $10 to $20 that a locality may collect from each person granted a local permit as a door-to-door vendor. This act is effective July 1 , 1983.
HOUSE BILL 39 (Chapter 550)
This act amends §58-266.8 to increase the maximum license tax on itinerant merchants and peddlers from $50 to $500. This act also clarifies that a manufacturer is exempt from the tax with respect to the sale of goods manufactured by him at a plant subject to the intangible personal property tax and broadens the exemption for dairymen selling in cities to those selling in counties and towns. This act is effective July 1 , 1983.
HOUSE BILL 418 (Chapter 554)
This act amends §58-266.1 to provide that amounts of tax paid by or to oil companies as the result of the oil company excise tax shall not be included in gross receipts for any license tax on gross receipts. This act is effective July 1, 1983.
HOUSE BILL 423 (Chapter 252)
This act adds a section 58-266.5:1 to prohibit the imposition of a license tax for any fraction of a year during which a licensee is not engaged in business in a locality. This act is effective July 1, 1983.
TRANSIENT OCCUPANCY TAX
SENATE BILL 5 (Chapter 313)
This act amends §58-76.1 to authorize James City County to levy a transient occupancy tax at a maximum rate of two percent effective July 1 , 1983.
INDEX OF BILLS AND RESOLUTIONS
SENATE BILL OR JOINT RESOLUTION NUMBER Page Number
SB 5 Transient Occupancy (James City County)
SB 24 Property (Merchants Capital)
SB 78 Forest Products (Flat Tax)
SB 224 Property (Railroad and Pipeline Company Assessments)
SB 262 Sales and Use (Therapeutic and Rehabilitative Services)
SB 266 General (Set-off Collection of Local Debts)
SB 271 Property (Administrative and Procedural Changes)
SB 274 Property (Administrative and Procedural Changes)
SB 278 Income (Urban Enterprise Zone Provisions)
SB 298 Property (Proration of Personal Property Tax James City and Loudoun Counties)
SB 334 Income (Estimated Tax Payments)
SB 358 Income (Social Security Benefits)
SJR 49 Income (Urban Enterprise Zone Study)
HOUSE BILL NUMBER
HB 20 License (Door-to-Door Salesmen)
HB 26 Property (Proration of Personal Property Tax Albemarle County and Falls Church)
HB 32 Property (Virginia Port Authority)
HB 39 License (Itinerant Merchants/Retail Peddlers)
HB 40 Sales and Use (Housing and Assistance for 111 Children)
HB 215 Recordation (Governmental Leases)
HB 218 Excise (Peanuts)
HB 246 Property (Merchandise In Transit)
HB 249 Property (Recordation of Delinquency)
HB 276 General (Policy Statements)
HB 320 Sales and Use (Industrial Manufacturing).
HB 353 Property (Cable Television Property)
HB 370 Property (Duplicate Tax Receipts)
HB 373 Income (Computers Donated to Schools)
HB 403 Recordation (Wraparound Deeds of Trust)
HB 417 Sales and Use (Schools for Handicapped)
HB 418 License (Oil Company Gross Receipts)
HB 423 License (Proration)
HB 436 Property (Foreign Trade Zones)
HB 463 Property (Erroneous Sales for Delinquent Taxes)
HB 537 Property (Bonafide Purchasers of Motor Vehicles)
HB 538 Probate (Valuation of Estates)
HB 549 Sales and Use (Face-to-Face Education in American Government)
HB 572 Property (Condominium/Cooperative Conversion)
HB 590 General (Set-off Collection of State Agency Debts)
HB 648 Property (Collection Costs)
HB 669 Sales and Use (Newspaper Inserts)
HB 687 Property (Computer Hardware)
HB 754 Property (Ownership of Property)
HB 846 Sales and Use (Dealer Records)
HB 848 Sales and Use (Churches)
HB 858 Property (Notice of Intent to Sell)
Rulings of the Tax Commissioner