Bulletin Number
VTB 81-14
Tax Type
Property Tax
Description
1981 Legislative Changes: Property Tax
Topic
Property Subject to Tax
Date Issued
06-19-1981
Subject: Property Tax: 1981 Legislative Changes
The 1981 Session of the General Assembly passed several laws affecting property taxes. The purpose of this bulletin is to announce those changes.
1. Daily Rental Passenger Cars: §§ 58-405, 58-685.20, 58-685.23, 58-685.25 and 58-833 were amended and § 58-685.12:1 was added to classify daily rental passenger cars as merchants capital rather than tangible personal property thus removing a locality's authority to levy a tangible personal property tax on such cars. This bill imposes an additional two percent motor vehicle sales and use tax on the rental of such cars which is in addition to the three percent tax currently imposed on vehicles rented for less than twelve months. The additional two percent tax will be distributed quarterly to the city, town or county where the car was delivered to the rentee.
Credit shall be granted any rentor subject to the additional tax on the rental of daily rental passenger cars for the portion of the tangible personal property tax assessed by any locality after July 1, 1981.
The effective date of this amendment is July 1, 1981. (Chapter 145, 1981 Acts of Assembly, House Bill 1178)
2. Personal Property Book: §§ 58-879 and 58-884 were amended to eliminate the requirement that a copy of the personal property book be filed in the office of the clerk of the circuit court.
The effective date of this amendment is July 1, 1981. (Chapter 158, 1981 Acts of Assembly, House Bill 1108)
3. Separate Classification for Certain Aircraft: § 58-829.5 prior to 1981 amendment established a separate classification for personal property taxation for aircraft having a seating capacity of no more than thirty-six, which are owned and operated by scheduled air carriers operating under certificates of public convenience and necessity issued by the State Corporation Commission or the Civil Aeronautics Board.
The law was amended to increase the maximum seating capacity of aircraft qualifying for the separate classification from thirty-six to fifty.
A different tax rate no higher than the rate for other tangible personal property, may be established by local ordinance for this classification.
The effective date for this amendment is July 1, 1981. (Chapter 236, 1981 Acts of Assembly, House Bill 1400)
4. Fiscal Year Assessment of Tangible Personal Property: §§ 58-834 and 58-351.6 were amended to require localities which assess tangible personal property on a fiscal year basis to exonerate or refund personal property taxes for the portion of the year for which the property was properly assessed by another jurisdiction and the tax paid.
The effective date of the amendment is July 1, 1981 (Chapter 437, 1981 Acts of Assembly, House Bill 1513)
5. Exemption of Certain Property Owned by Any Transportation Districts: § 58-831.2 was amended to exempt from local taxation, as tangible personal property, tangible personal property owned by any transportation district organized under the Transportation District Act of 1964 (§ 15.1-1342) and leased to provide transportation services.
This amendment is effective July 1, 1981 (Chapter 442, 1981 Acts of Assembly, House Bill 1627).
6. Separate Classification of Heavy Construction Machinery: § 58-829.8 was added which establishes a separate classification of heavy construction machinery for taxation as tangible personal property.
All heavy construction machinery including, but not limited to, land movers, bulldozers, front-end loaders, graders, packers, steam shovels, cranes, pile drivers and ditch and other types of diggers are included in this classification.
A separate tax rate no higher than the tax rate on other tangible personal property may be established by local ordinance for this class of property.
The amendment is effective July 1, 1981. (Chapter 445, 1981 Acts of Assembly, House Bill 1699)
7. Reassessment at Five Year Intervals by Certain Counties: § 58-778 prior to 1981 amendment permitted a county with population of 40,000 or less to elect by majority vote of its board of supervisors to reassess real estate at six year intervals.
The 1981 amendment permits such counties to reassess at either five year or six year intervals, as well as the four year interval which is effective unless the local governing body adopts one of the alternatives.
The amendment is effective July 1, 1981. (Chapter 439, 1981 Acts of Assembly, House Bill 1560)
8. Redress by Courts of Assessment of Nonexistent Property: § 58-1147 was amended to permit a court to grant redress for an assessment made on nonexistent property without regard to the statute of limitations.
The amendment is effective July 1, 1981. (Chapter 178, 1981 Acts of Assembly, House Bill 1597)
9. Change in Requirement for Notice of Public Hearing to Increase any Local Tax Rate: § 58-846.1 was amended to change the notice period for the public hearing to increase any local tax rate from 15 days to 7 days.
The amendment is effective July 1, 1981. (Chapter 143, 1981 Acts of Assembly, House Bill 1062)
10. Method of Assessing Leasehold Interests: § 58-758.1 which provides the method for assessing leasehold interests pursuant to § 58-758 was amended. The new method returns to language similar to that currently in effect but which would have changed July 1981.
The new language requires assessment to the holder of the leasehold interest as if he were the owner if the term of the lease is 50 years or more or if the lease provides that the lessee may acquire the property for a nominal sum at the completion of the term of the lease. If the remaining term of the lease is less than 50 years, the assessment shall be reduced by two percent for each year the remainder of the term is less than 50 years. No assessment may be reduced more than 85 percent.
The amendment is effective July 1, 1981. (Chapter 431, 1981 Acts of Assembly, House Bill 1237)
11. Tax Relief for the Elderly: § 53-760.1 was amended to increase the maximum total combined income limitation for eligibility for tax relief to the elderly and the totally and permanently disabled from $15,000 to $18,000. This limitation is $19,000 if the exemption is reduced by the amount the total combined income exceeds $18,000. The limitation is $22,000 if a program provides for both exemptions and deferrals and provides for a deferral of real estate taxes if the total combined income exceeds $18,000.
The limitation on net combined financial worth is increased from $55,000 to $65,000. To be effective these new limits must be included in the local ordinance.
The amendments are effective July 1, 1981 (Chapter 434, 1981 Acts of Assembly, House Bill 1399)
12. Partial Exemption of Rehabilitated Real Estate: § 59-760.2 was amended to provide that multi-family residential rental property consisting of five or more units may qualify for partial exemption as rehabilitated residential real estate if the increase in value due to rehabilitation is at least 20 percent.
Prior to amendment the increase in value was required to be at least 40 percent. To be effective this change must be incorporated in the local ordinance.
The effective date of the amendment is July 1, 1981. (Chapter 625, 1981 Acts of Assembly, House Bill 1307)
13. Advertisement of Tax Increase Due to Reassessment of Real Estate: § 58-785.1 was amended to change advertising a tax increase due to reassessment. The public hearing must now be advertised seven days in advance and the advertisement must include specified information.
The amendment is effective July 1, 1981. (Chapter 212, 1981 Acts of Assembly, House Bill 1327)
14. Local Treasurer Must Accept Certain Prorata Partial Payments: § 58-966 was amended to require the local treasurer to accept a prorata partial payment of taxes on property sold at a foreclosure sale and to credit such payment against the tax on the property.
The amendment is effective July 1, 1981. (Chapter 134, 1981 Acts of Assembly, House Bill 1293)
15. Assessments for Local Improvements: § 15.1-239 was amended to provide that assessments on abutting property owners for the initial improving and paving of existing streets in cities with a population in excess of 170,000 cannot exceed ten dollars per front foot or $1,000 for each subdivided lot or parcel abutting the street, whichever is less. The limitation was five dollars per front foot or $500 prior to this amendment. Also § 15.1-18.3 was amended to permit cities with population between 20,000 and 21,000 to designate by ordinance primary and secondary downtown assessment districts for special improvements, planning and promotion, and to impose different tax rates upon property owners, provided such taxes do not exceed the peculiar benefits to owners resulting from special improvements, planning and promotion.
The amendments are effective July 1, 1981. (Chapters 584 and 631, 1981 Acts of Assembly, House Bills 1408 and 1587)
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