Tax Type
Recordation Tax
Description
Deeds transferring utility assets
Topic
Collection of Tax
Date Issued
12-11-1986
December 11, 1985
Re: §58.1-1821 Application for Correction; Recordation Tax
§58.1-802 "Grantor's Tax"
§56-90.1 Utilities Transfer Act
Dear ****
This is a follow-up to a previous ruling letter dated June 10, 1985. That letter held that a number of deeds transferring utility assets could be recorded free of state recordation taxes, but that local recordation taxes would be due pursuant to an exception in Virginia Code §56-90.1.
When the deed was recorded in ***** County the clerk collected his fee and one-third of the tax which would have been due under §58.1-801, to which the taxpayer does not object. The clerk also collected the one-half of the tax imposed by §58.1-802 (commonly referred to as the grantor's tax,) which that section provides is to be retained by the clerk for the locality. The taxpayer objects to this tax on the grounds that it is a state recordation tax.
Section 56-90.1 provides, in pertinent part:
The grantor's tax is imposed by §58.1-802 which is part of a chapter known and cited as the "Virginia Recordation Tax Act" §58.1-800. It has always been considered a state tax. See Report of the Attorney General for 1970-1971 at page 379, and 1969-1970 at 281.
Although the clerk of the circuit court is required to collect the tax, and allowed to retain one-half for the locality, it is still a state tax.
The "local recording taxes" payable under §56-90.1 refer to recordation taxes imposed by a local ordinance enacted pursuant to §§58.1-814 and 58.1-3800. Section 58.1-802 contains an express prohibition against any increase in local recordation taxes due to the grantor's tax.
Accordingly, the assessment of one-half of the grantor's tax under §58.1-802 was erroneously collected by the clerk upon recordation of the deed. You should contact the clerk to obtain a refund.
Sincerely,
W. H. Forst
Tax Commissioner
Re: §58.1-1821 Application for Correction; Recordation Tax
§58.1-802 "Grantor's Tax"
§56-90.1 Utilities Transfer Act
Dear ****
This is a follow-up to a previous ruling letter dated June 10, 1985. That letter held that a number of deeds transferring utility assets could be recorded free of state recordation taxes, but that local recordation taxes would be due pursuant to an exception in Virginia Code §56-90.1.
When the deed was recorded in ***** County the clerk collected his fee and one-third of the tax which would have been due under §58.1-801, to which the taxpayer does not object. The clerk also collected the one-half of the tax imposed by §58.1-802 (commonly referred to as the grantor's tax,) which that section provides is to be retained by the clerk for the locality. The taxpayer objects to this tax on the grounds that it is a state recordation tax.
Determination
Section 56-90.1 provides, in pertinent part:
-
- No State recording tax shall be payable upon the admission to record of any deed . . . ; provided, however, that any local recording taxes shall be payable as though the State recording taxes had been collected.
- No State recording tax shall be payable upon the admission to record of any deed . . . ; provided, however, that any local recording taxes shall be payable as though the State recording taxes had been collected.
The grantor's tax is imposed by §58.1-802 which is part of a chapter known and cited as the "Virginia Recordation Tax Act" §58.1-800. It has always been considered a state tax. See Report of the Attorney General for 1970-1971 at page 379, and 1969-1970 at 281.
Although the clerk of the circuit court is required to collect the tax, and allowed to retain one-half for the locality, it is still a state tax.
The "local recording taxes" payable under §56-90.1 refer to recordation taxes imposed by a local ordinance enacted pursuant to §§58.1-814 and 58.1-3800. Section 58.1-802 contains an express prohibition against any increase in local recordation taxes due to the grantor's tax.
Accordingly, the assessment of one-half of the grantor's tax under §58.1-802 was erroneously collected by the clerk upon recordation of the deed. You should contact the clerk to obtain a refund.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner