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P.E. County Admin, Attorney Mistaken on Personal Property Tax Law

   Written by on August 23, 2013 at 10:49 am

At the August 13, 2013 Board of Supervisors meeting, Supervisor Don Gantt made a motion to hold a public hearing to lower the personal property tax rate on airplanes based in Prince Edward County from $4 per hundred to $.50 per hundred. Gantt asserted that making this change would attract more aircraft to Prince Edward County. After some discussion, the motion passed unanimously and a public hearing will be held at the regular meeting on September 10, 2013.

In the discussion of this motion, supervisors questioned when and how aircraft are taxed. It is a common practice for aircraft to be flown to an area with more friendly tax rates for January 1 to avoid paying higher rates. Prince Edward’s attorney, Jim Ennis, spoke up and stated, “They’re taxed where they are located on January 1.” “Correct,” Bartlett agreed. Gantt disagreed, stating that he had been informed that aircraft were taxed based on where they are located most of the time, not on their location on tax day. Bartlett stated, because of a Supreme Court Case quoted below, that airplanes were taxed based on where they were located on January 1. “There was a court case, it’s where they are on one January. Period.” Bartlett concluded.

According to that Supreme Court case, this is not the case.

According to the April 20, 2001 case (Shelor Motor Company, Inc. vs. Nancy W. Miller, Commissioner of the Revenue For Montgomery County), “tangible personal property, merchants’ capital and machinery and tools shall in all cases be [be taxed in] the county, district, town or city in which such property may be physically located on the tax day.” The opinion allowed Shelor Motor Company to move stock from car dealerships located in Montgomery County to other lots outside the county where the tax rate was lower since Shelor’s stock was classified as merchants’ capital (§ 58.1-3510A “…defined as follows: Inventory of stock on hand…”) instead of automobiles.

The court goes on to state that, according to Code of Virginia Code § 58.1-3511(A), “However, the situs [where the property is taxed, in this instance] for purposes of assessment of motor vehicles, travel trailers, boats and airplanes as personal property shall be the county, district, town or city where the vehicle is normally garaged, docked or parked.”

Prince Edward County’s personal property tax rate on aircraft ($4 per hundred) is one of the highest in the area. For comparison:

  • Cumberland’s rate is $.50 per hundred of assessed value.
  • Buckingham County’s rate is $.55 per hundred of assessed value.
  • Nottoway County’s rate is $1.00 per hundred of assessed value.
  • Lunenburg County’s rate is $2.10 per hundred of the assessed value.
  • Appomattox County’s rate is $4.60 per hundred (on 50% of assessed value, effectively $2.30 per hundred).
  • Mecklenburg County’s rate is $3.26 per hundred of assessed value.
  • Halifax County’s rate is $3.60 per hundred of assessed value.
  • Charlotte County’s rate is $3.75 per hundred.
  • Campbell County’s rate is $4.45 per hundred.
  • Further north, Fairfax and Loudoun Counties charge $.01 per hundred.

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