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)