Tax Type
Recordation Tax
Description
Deed of gift to church
Topic
Exemptions
Date Issued
06-09-1995
June 9, 1995
Re: Request for Ruling; Recordation Tax
Dear***********
This is in response to your letter requesting a ruling as to whether a deed of gift conveying property to the Trustees of***********(hereafter, "the Church") is exempt from recordation tax.
FACTS
A deed of gift was presented for recordation that conveyed property to the trustees of the church. The deed claimed to be exempt from recordation tax under Code of Virginia §58.-811 (2)" (Sic., probably intended to refer to §58.1-811 A.2).
RULING
The reference to trustee or trustees of a church in §58.1-811 A.2 refers to church trustees and ecclesiastical officers within the meaning of Article 2 of Title 57 (§57-7 et seq.) of the Code of Virginia. Since this article is clearly intended to give effect to conveyances to churches which might otherwise be questioned, it appears that the recordation tax exemption which uses similar language is intended to exempt conveyances to churches which are covered by the article. Therefore, the deed is exempt from the recordation tax imposed pursuant to §58.1-801 (the "grantee" tax).
The exemption in §58.1-811 C from the tax imposed by §58.1-802 (the "grantor's" tax) does not apply to this conveyance. The reason for this is that a church may purchase property for religious purposes. In the case of a purchase, the deed (and church) would be exempt from the grantee tax under §58.1-811 A.2, but the seller would be subject to the grantor's tax on the sales price. However, the grantor's tax applies only to deeds conveying property sold. 1984-1985 Att'y. Gen. Ann. Rep. 388. It is clear that this deed is conveying property pursuant to a donation, not a sale. Therefore, no grantor's tax should be imposed on the recordation of the deed in question.
Although the deed clearly states that it is a deed of gift, and the conveyance appears to have been made without consideration, a question may arise as to whether the deed qualifies for the exemption in §58.1-811 D. Because this exemption applies only to deeds of gift between individuals, one may question whether the exemption applies to a deed to unnamed individuals who are acting as trustees for a church. There is no need to address this question since the deed is clearly exempt under the provisions just discussed. Furthermore, this exemption was amended by the 1995 General Assembly (Chapter 301, HB 1792) to apply to gifts between persons other than individuals effective July 1, 1995.
I trust that this ruling will resolve the issue. If you have any questions please contact*****************.
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- Sincerely,
Danny M. Payne
Tax Commissioner
- Sincerely,
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Rulings of the Tax Commissioner