Tangible Personal Property Taxes et al. (Arlington, Fairfax: for sale, rental, homes)

[KronosII]

I noticed in a previous post that Virginia levies a tax on tools and machinery. I assume that this is business related and that the hammer I've owned for 20 years all of a sudden is to be taxed upon moving to Virginia.

It is my understanding, based on some web research, including looking at Virginia's taxation department web pages, that a Virginia resident must pay a tax, annually, on every TV set owned, computers and their operating system(s), audio equipment, and likely other items.

I could not discern what kind of taxes Virginia levies on other assets, such as stocks, mutual funds, and bank accounts in general. Also, I couldn't determine how Virginia would tax a real property asset that I happened to own in a different state that I purchased while a resident of another state.

Any answers would be appreciated, but I am looking for real experiences of Virginia residents, including history of how you've dealt with the taxes, etc.

[tgbwc]

Originally Posted by KronosII

It is my understanding, based on some web research, including looking at Virginia's taxation department web pages, that a Virginia resident must pay a tax, annually, on every TV set owned, computers and their operating system(s), audio equipment, and likely other items.

That is incorrect. We don't pay an annual tax on those things. You will have to pay an annual tax on any vehicles (i.e. cars, trucks, boats, planes, motorcycles, etc).

[Flamingo13]

Exactly! I don't know where the OP came up w/the outrageous items but as tbgwc stated: it's on vehicles (I believe also farm equipment, but since I don't have a farm and doubt the OP does/will it doesn't matter).

[KronosII]

tgbwc,

Thanks for the quick response. Here's where I found that information: http://www.tax.virginia.gov/taxforms...x/2009/762.pdf

The form even lists fishing equipment. Again, thanks for any response, but I would like to hear from anyone who has either avoided these taxes, paid them or simply ignored them, or protested against them, has anecdotes, etc..

Also, my web search first started with this page: http://www.bankrate.com/caf/itax/edi...a.asp?caret=1e. It looks like these taxes aren't levied at the state level but at the local level. Still, Form 762 is a state form and not a city or other municipality's form. Thus there appears, to me, to be a disconnect in the information.

Here's a link to where I found the info on computer operating systems: http://www.arlingtonva.us/department...TaxFAQsQA.aspx

[KronosII]

Hmmm, about a week later and no further information. what's funny is that Virginia has a pole tax (a tax on fishing poles!). I'll have to educate myself on this issue rather than ask here. I will post what I have found in the future.

[KronosII]

Here is what I've discovered through more web searching, .

1. The personal property tax is levied on tangible property used for business purposes. This is not a state tax. It appears to be levied at the county and/or city level. The Shenandoah county website says "The County of Shenandoah levies a tax on tangible personal property used in a trade or business..." And "...to include but not limited to such items as furniture, computer, fixtures, machinery and tools located in the County on January 1st."

2. As stated, form 762 lists all sorts of things, "outrageous" or not - realize that there is a genuine source for this. Form 762 is: "RETURN OF TANGIBLE PERSONAL PROPERTY, MACHINERY AND TOOLS, AND MERCHANTS’ CAPITAL — FOR LOCAL TAXATION ONLY" - caps taken from the form. Thus, the form is issued at the State level for local use only - as a locality sees fit though local legislation, no doubt. the form has an itemized list for all sorts of things... Line 10 is for "Furniture and office equipment, including books, used in practicing a profession." Line 15 of the form is for "Tangible personal property consisting of programmable computer equipment and peripherals used in business." Line 27 is for "Felled timber, ties, poles, cord wood, bark and other timber products." Line 28(c) is for "Pianos and organs, television sets, radios, phonographs and records and all other musical instruments." Line 29 is for "Seines, pound nets, fykes, weirs and other devices for catching fish."

3. Shenandoah county also says, "Definition of Merchants' Capital -- Merchants' capital is defined as follows: Inventory of stock on hand; daily rental vehicles, daily rental property, and all other taxable personal property of any kind whatsoever, except money on hand and on deposit and except tangible personal property not offered for sale as merchandise, which tangible personal property shall be reported and assessed as such."

4. This kind of language, from Smyth county (http://www.smythcounty.org/Economic%20Development/Taxes.htm - broken link), is somewhat equivocal: "Virginia tax code requires all business owners, including home-based businesses, to file a business tangible personal property return annually. Smyth County levies a tax on tangible personal property used in trade or business (such as office furniture, machinery, and tools) located in Smyth County on May 1." What's confusing is that the phrases "tangible personal property," "business tangible personal property," and "personal property" are used throughout the web page and they're not necessarily of the same meaning. Legally (I'm not a lawyer), my understanding is that they do not have the same meaning.

5. As the two replies indicated, vehicles are taxed as personal property. The city of Arlington says, "[the] [/SIZE]Vehicle Personal Property Tax... [is applicable to ] Automobiles, trucks, buses, motorcycles, motor homes, trailers, semitrailers, and boats." Note that this is specifically a "vehicle personal property tax" and NOT a "tangible personal property tax." It looks like the tax on vehicle personal property is not at the State level, for example, Fairfax county's web site seems to explain this.

6. The Virginia Dept. of Motor Vehicles talks about vehicle taxes as though they are sales taxes. "Unless exempted under Va. Code § 58.1-2403 (http://www.dmv.virginia.gov/exec/link.asp?653 - broken link), Virginia levys a 3% Motor Vehicle Sales and Use Tax based on the vehicle's gross sales price or $35, whichever is greater. This tax is collected at the time of titling whenever a vehicle is sold and/or ownership of the motor vehicle changes."

Summary:

*The State of Virginia does not levy a tax on personal property.
*Virginia localities can and do levy taxes on personal property as they see fit. I am 99% sure that this applies to personal property used for business purposes.
*Virginia localities can and do levy taxes on non-business personal property, limited to automobiles (cars). This is a controversial tax that still is on the books despite legislative fights against it.

So, as I may be relocating to Virginia, I will look out for a tax on my personal vehicle, in addition to income tax, sales tax, real property tax - just like where I live right now (New York). My personal assets, like stocks and such, will be taxed as income - if I happen to profit off them.

If anyone would like to comment on the summary, please do. The rest of the information I took from official Virginia locality websites.

[tgbwc]

Originally Posted by KronosII

Summary:

*The State of Virginia does not levy a tax on personal property.
*Virginia localities can and do levy taxes on personal property as they see fit. I am 99% sure that this applies to personal property used for business purposes.
*Virginia localities can and do levy taxes on non-business personal property, limited to automobiles (cars). This is a controversial tax that still is on the books despite legislative fights against it.

So, as I may be relocating to Virginia, I will look out for a tax on my personal vehicle, in addition to income tax, sales tax, real property tax - just like where I live right now (New York). My personal assets, like stocks and such, will be taxed as income - if I happen to profit off them.

If anyone would like to comment on the summary, please do. The rest of the information I took from official Virginia locality websites.

I believe your summary is pretty much correct. The state currently "picks up" 75% of the personal property tax on vehicles. The counties set their personal property tax rate (usually per $100 assessed value) and the state covers 75% of that. You may find that the sales tax is lower than where you are, I'm not sure. My in-laws live in PA and pay a higher sales tax than we do, plus a fairly hefty, seperate school tax that we don't pay.