Virginia Supreme Court Hears Arguments Against Increased “Grantor’s Tax”

The Virginia Supreme Court will hear arguments today in the case of the new transportation taxes (aka increased "Grantor’s Tax") set by the Northern Virginia Transportation Authority (NVTA).

NVTA Vice Chairman is "fairly confident that the NVTA is going to prevail". But Loudoun County Supervisor Eugene Delgaudio (R-Sterling) says that “If the General Assembly has the constitutional power to delegate taxing authority to unelected officials, this will be a record and a precedent for the state of Virginia”.

Here’s an excerpt from the full article:

"The Virginia Supreme Court is set to consider the $335 million constitutional battle over the legality of Northern Virginia’s new transportation taxes today in Richmond.

The state’s highest judicial panel will address lingering legal questions about whether the General Assembly has the power to direct the Northern Virginia Transportation Authority to collect seven new taxes and fees for long-needed transit projects.

Loudoun County and several Republican politicians challenged the NVTA’s powers to tax and borrow that took effect Jan. 1, saying only elected officials have that authority."

Source: LoudounExtra.com

Reminder: Increase In Virginia Grantor’s Tax Takes Effect January 1st

A 500% increase in the Virginia Grantor’s Tax approved as part of a 2007 transportation funding package (HB 3202) will take effect January 1, 2008. The Virginia General Assembly and the Northern Virginia Transportation Authority (NVTA) voted earlier this year to increase the rate to a total of $5.00 per $1,000 to fund regional transportation projects. Currently, the rate is $1.00 per $1,000.

After the vote, the state filed a case in Arlington to ensure that the move was legal. A judge in Arlington County Circuit Court decided in favor of the NVTA.

Loudoun County and Delegate Bob Marshall then filed a counter suit and also appealed the decision to the Virginia Supreme Court. Last month, the Supreme Court granted Loudoun County’s petition for an appeal of the NVTA decision by the Arlington Circuit Court.

The case may be considered in January 2008, but the increase is still set to go into effect January 1, 2008.

For more information on the Virginia Grantor’s Tax and it’s implementation check out these documents.

Virginia Grantor’s Tax Update

The Loudoun County Board of Supervisors’ (BOS) case challenging the Northern Virginia Transportation Authority’s (NVTA) ability to impose seven new regional taxes, including a 500% increase in the grantor’s or home seller’s tax, is headed for the Supreme Court of Virginia. The Supreme Court will hear arguments in the case during its January session, which will be held between Jan. 7 and Jan. 11 in Richmond. The Supreme Court will then determine whether the tax is constitutional or not.

Last summer, the Arlington County Circuit Court ruled that the NVTA’s fees and taxes were constitutional and that the General Assembly was within its right when it granted taxing authority to the NVTA during the 2007 legislative session. When the NVTA filed a bond-validation suit, the BOS voted to challenge the constitutionality of the fees.

At the same time it hears the BOS appeal of the Arlington County Circuit Court ruling, the Supreme Court will hear a lawsuit brought by Del. Robert Marshall (R-13) against the NVTA. Apparently, the lawsuits will be heard together in an effort to bring closure on the issue.

An exact date for the appeal is expected to be released closer to the end of the year, but it’s looking like it may be on January 10, 2007.

Source: Dulles Association of Realtors (DAAR)

Related Articles:

Virginia Circuit Court Rules In Favor Of  NVTA And Increase In Grantor’s Tax (8/28/07)

Grantor’s Tax and Northern Virginia Transportation Plan Update (7/3/07)

Repeal the Grantors Tax

The Northern Virginia Transportation Authority was recently given the authority by the state to impose new taxes for transportation costs in Northern Virginia.  One of the most unbelievable tax increases proposed and authorized (but not yet in effect) is the Grantors Tax. 

This is a fee that every home seller pays at settlement to the State of Virginia.  Currently the tax is $1 per $1000 of the sales price of a house.  For instance, if you sell your house for $450,000 you pay the state of Virginia $450. 

The authorized increase will change the tax from $1 per $1000 to $5 per $1000, an increase of 5 times the current rate.  So now the $450 Grantors Tax will become $2250. 

Why this tax is so completely ridiculous is two-fold.  First of all, it fines the people who are leaving the area and actually lessening the amount of traffic in the area.  That is backwards.

Second, it makes people who currently live here and are considering moving up, think twice about doing so.  This actually hurts the local economy.   The move up buyer was a vital group of buyers during the bull market run of a couple years ago.

I have an idea that might do the same thing as this ridiculous tax.  How about hiring less workers to stand around on the side of the road at every highway construction zone?  Every time I drive by at least half, if not all of these workers are standing around doing absolutely nothing. 

Here is a petition to sign asking that this tax be repealed if you are opposed to the increase in the Grantors Tax.