Increase In Virginia Grantor’s Tax Shot Down

Governor Kaine’s proposal to raise the statewide Grantor’s Tax was shot down last week. Here’s the press release from the Virginia Association of Realtors®:

"Virginians still awaiting a realistic solution to transportation woes

Virginia legislators’ latest effort at a fiscal fix for transportation collapsed early last Thursday morning…at 1:39 a.m. to be exact.

After first defeating two statewide transportation bills, including one proposed by Governor Kaine (which included a statewide grantor tax), the House approved legislation financing projects in Hampton Roads and Northern Virginia only.

In the House, Kaine’s proposal was defeated 98-0. House members used a sagging real estate market as a reason to vote against the proposed statewide grantor tax.

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How To Request A Refund On Your Grantor’s Tax

Governor Timothy M. Kaine signed House Bill 1578 which establishes procedures to return taxes and fees collected by the Northern Virginia Transportation Authority (NVTA). The Clerks of the Circuit Courts will work with settlement agents to return the congestion relief fee (real estate grantor’s tax) to the affected settlement agents within 60 days. The settlement agent will in turn refund the individuals or entities that paid the congestion relief fee. The Clerks will jointly develop uniform guidelines for the return of the fee within 60 days.

Sellers who sold their property (settled) on or after January 1, 2008 and paid the higher tax rate should call their settlement agent or the NVTA at 703-766-4650 for additional information. Additional information on the return of taxes and fees collected can be found at www.hb3202.virginia.gov and www.thenovaauthority.org.

(via Dulles Area Association of Realtors®)

Related Articles

Grantor’s Tax Update – Court Rules NVTA Taxing Powers Unconstitutional

-Danilo

Update #2 To Grantor’s Tax Refunds

This just in from the Northern Virginia Transportation Authority (NVTA) regarding Grantor’s Tax (Congestion Relief Tax) refunds:

"Some news media outlets are reporting that it will take “three years to refund monies” collected by NVTA.

This is INCORRECT and a misinterpretation of the memo posted on the NVTA web site.

While it may be challenging to track down SOME taxpayers, it can be done and will be done within a few months.

For those rare cases when we will not be able to track a taxpayer down, the law requires that any UNCLAIMED monies be held in trust for up to three years and if unclaimed will, by law, revert to Virginia’s Literacy Fund. 

It will NOT take three years to refund this money. Taxpayers have up to three years to claim monies if they are not automatically refunded.

Please adjust your reports immediately.  Reporting inaccurate information is unnecessarily upsetting residents and taxpayers. 

We continue to ask that taxpayers be patient, hold onto their receipts and wait for further instructions which will come soon."

Related Articles:

NVTA To Stop Collecting Grantor’s Tax and Fees Effective Immediately

Update To Grantor’s Tax Refunds

Official Press Release From NVTA Regarding Today’s Court Ruling

Grantor’s Tax Update – Court Rules NVTA Taxing Powers Unconstitutional

NVTA To Stop Collecting Grantor’s Tax and Fees Effective Immediately

The Northern Virginia Transportation Authority (NVTA) just announced this morning that they will no longer be collecting taxes and fees, including the higher Grantor’s Tax, effective immediately. They are instructing people not to contact the NVTA for refunds at this time. Once they have the refund process and staff in place, they will announce the procedures at that time.

Whether this means that the clerks of the courts will stop collecting them is another story. As of yesterday, they were not told by the Attorney General to stop collecting the higher Grantor’s Tax from sellers and were continuing to do so. And there is still a 10 day appeal process available to the NVTA.

UPDATE: In light of this decision, Loudoun County’s Clerk of the Court will no longer collect the regional transportation grantor’s tax effective today, March 4, 2008. The Clerk’s office is awaiting a response from the NVTA regarding the announcement of refund procedures for grantors taxes collected since January 1st, 2008.

Here is the official press release from the NVTA:

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Update #2 To Grantor’s Tax

During my closing/settlement today, I spoke with the settlement attorney regarding the Grantor’s Tax. He told me that the clerks of all the local courts in Northern Virginia said that sellers are still required to pay the new Grantor’s Tax because the courts have not been told otherwise by the Virginia Attorney General. Once they hear from the Attorney General, they will let everyone know.

So if you’re settling in the near future, be prepared to pay the higher Grantor’s Tax, but keep an eye out for what happens over the next few weeks.

Update to Grantors Tax Refunds

We gave instructions on how to get your money back if you paid the extra grantors tax in this post.  We have found out that there will be at least a ten day hold on processing these refunds due to an appeals process with the state of Virginia Supreme Court.  So don’t try and get your money just yet.  We will keep you posted.

How To Get A Refund On Your Grantor’s Tax

If you sold your home in Virginia after December 31, 2007 and paid the higher Grantor’s Tax rate ($5 per $1000), you may request a refund on your Grantor’s Tax of the difference between the old rate ($1 per $1000) and the new rate.

The NVTA is currently handling the requests two ways – by phone (per locality) or by email. For the list of numbers for each locality, click here. If you wish to email the NVTA, here is their email: TheAuthority@thenovaauthority.org.

Official Press Release From NVTA Regarding Today’s Court Ruling

As many of you know, the VA Supreme Court today ruled that the taxing powers given to the Northern Virginia Transportation Authority (NVTA) were unconstitutional. Well, here is the official press release from the NVTA on the matter:

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Grantor’s Tax Update – Court Rules NVTA Taxing Powers Unconstitutional

Today, the Virginia Supreme Court ruled unconstitutional the taxing powers given to the Northern Virginia Transportation Authority (NVTA). This gives serious doubt as to whether the Grantor’s Tax will remain in effect. The Grantor’s Tax was increased by 500% beginning January 1, 2008 as part of the NVTA’s plan.

Governor Tim Kaine and the Virginia General Assembly originally empowered the NVTA to collect specific taxes in Northern Virginia to spend on transportation improvements in the region. Part of these taxes included the "Grantor’s Tax" paid by home owners when selling their homes.

The NVTA went to an Arlington court to confirm its authority to sell bonds against the increased tax revenue that would be collected. Loudoun County immediately jumped in to oppose the NVTA.

The case then made its way up to the Virginia Supreme Court, which heard arguments on January 8, 2008 and ruled on it today.

Those who settled between January 1, 2008 and today can contact the NVTA to request a refund on their Grantor’s Tax.

For the actual VA Supreme Court ruling, click here.

UPDATE: If you sold your home after December 31, 2007 and paid the higher Grantor’s Tax rate ($5 per $1000), you may request a refund. For more information on how to do so, click here.

Partial Source: Loudoun Easterner

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.