Bulletin Number
VTB 83-4
Tax Type
Recordation Tax
Description
Leases; Wraparound deed of trust
Topic
Exemptions
Date Issued
05-16-1983
Virginia Department of Taxation
83-4
DATE: May 16, 1983
SUBJECT: Recordation Tax and Probate Tax: 1983 Legislative Changes
The 1933 Session of the General Assembly enacted several laws effective July 1, 1983; affecting recordation taxes and probate taxes. The purpose of this bulletin is to announce those changes.
Exemption for certain leases: § 58-58 was amended to provide an exemption from recordation tax for leases made to the United States, the Commonwealth, or any county, city, town, district, or other political subdivision of the Commonwealth (Chapter 89, House Bill 215).
Wraparound deed of trust: § 58-55 was amended to clarify that a recordation tax would be imposed only on that portion of the obligation secured by a "wraparound" deed of trust which is in addition (i.e., new money) to the amount of the existing debt, as long as the recordation tax was paid when the first deed of trust was recorded. (This section had been amended by the 1982 General Assembly to provide the same treatment for supplemental deeds of trust. The Department of Taxation interpreted the 1982 amendment as including "wraparound" deeds of trust.) (Chapter 553, House Bill 403).
Undervaluation of an estate for probate or administration tax: § 58-70 was amended to provide that the clerk of the court to whom the original probate or administration tax was paid shall compare the total value upon which the original tax was imposed, as shown on the probate tax return, with the total value on the inventory to determine whether the estate has been undervalued for tax purposes. If the clerk determines that the estate has been undervalued, he shall collect such additional tax as may be due. In the event of an overpayment of such tax, the personal representative may apply to the Department of Taxation for a refund. (Chapter 140, House Bill 538).
Tax Bulletins