12 March, 2001
To: Board of Supervisors (As email Attachment)
From: S. Carter
Re: FY 2001-2002 Budget (Local Taxes)
The following summary is presented for the Board’s review. The information provided pertains only to items of local taxation, which are deemed with regard to FY 02 relevant to the Board’s consideration. These include:
I. Personal Property Tax: Three assessment tools are utilized by local Commissioners of (the) Revenue (Retail Value, Loan Value and Trade in Value from the N.A.D.A Official Used Car Guide). Loan Value is 86% of Retail Value and Trade in Value is 78% of retail. Nelson County utilizes Loan Value, which results in an effective tax rate of $2.54 (i.e. 86% of $2.95). Staff consulted with J. Payne, Commissioner of Revenue, pertinent to this subject. Ms. Payne indicated that she was not comfortable with utilizing retail value as the basis of valuation. The fourteen- percent difference in loan versus retail would result in an increase of $362,858.00 in revenues (using the FY 02-revenue estimate of $2,591,843 times 114%). It is noted (subject to a confirming opinion from the County Attorney) that the assessment method is the discretion of the Commissioner of Revenue.
II. Machinery and Tools: It is recommended that the Board consider revising the current local tax on Machinery and Tools to increase the percentages utilized to establish the tax amount. The County’s current rates are 1st – 5th (years) – 40%, 6th – 10th (years) – 30%, 11th – 15th (years) – 20%, and 16th and later years – 10%. This results in effective tax rates (at the established rate of $1.25 per $100) of $0.50, 0.38, 0.25 and 0.13 respectively. A revised rate using (on a declining basis from year one to year six) of 100% to 50% and 40% for year 7 and later is recommended.
III. Cable Television: Section 58.1-3818.3 of the Code of VA authorized counties to levy a video programming excise tax on cable television providers not otherwise subject to local fees or taxes on gross receipts. The rate cannot exceed 5% and can be passed on to end-user subscribers itemized line charges. Information is not available internally to estimate the amount of revenues this tax may provide. As an example, however, gross receipts of $500,000 would result in $25,000 in revenues. Subject to an opinion from the County Attorney, it may be necessary to exempt the local cable provider from the BPOL tax (currently $30) in order to levy this tax.
IV. Motor Vehicle License (Decals): Section 46.2-752 of the Code of VA presently authorizes a fee of $23 for non-commercial passenger vehicles under 4,000 pounds and $28 for heavier vehicles. Nelson County’s current fee is $20 (uniform). A change to $23 (and to $15 for motorcycles) would result in an estimated increase of $41,250 (minimum, based on current FY 02 revenue estimate of $275,000).
V. Meals and Lodging: Consider a request for special legislation to allow Nelson County to increase the lodging tax from 2% to 5% (or a percentage to 5%). Such an increase, while not applicable in FY 02 and subject to state approval would result in an increase in revenues of $277,500 (from FY 02’s estimate of $185,000 to $462,500). It is noted that any increase above 2% must be used for tourism. However, the County’s current outlay for the Dept. of Tourism is $188,975.
VI. Admissions Tax: Nelson County is but one of a few counties that can levy an admissions tax (up to 10%). However, Nelson is restricted to “admissions charged for attendance at any spectator sport” (this excludes Wintergreen, which would be a tax on participants in sporting events). The Board may wish to consider proceeding with levying the tax, as currently authorized, and subsequently seek special legislation to allow the County to levy any of the five types of admission taxes allowed by state law.
VII. Wills and Administration: The County does not currently levy the allowed $03.3 per $100 that state law allows for the probate of wills. A prior memo received from County Attorney Payne indicated that the revenue in FY 99 (had the County had such a tax) would have been $3,944.
VIII. Concealed Weapons Fee: The Code of VA allows a fee of $35. The County is currently charging $10. It is understood that such permits are valid for five years. In 2000 fifty-nine (59) permits were issued. In 1998 and 1999 the number of permits issued was 156 and 177 respectively. The respective increases in revenue at $35 would have been $3,900, $4,425 and $1,400 (1998 to 2000).
Please advise should additional information on the above or other subjects is required.
The Board’s consideration is appreciated.
Cc: D. McCann, Finance
Subject File