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1996 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 58.1-3603 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-3603. Exemptions not applicable when building is source of revenue.
A. Whenever any building or land, or part thereof, exempt from taxation
pursuant to this chapter and not belonging to the Commonwealth is leased or
is otherwise a source of revenue or profit, whether by lease or
otherwise, all of such buildings and land shall be liable to taxation as
other land and buildings in the same county, city or town. When a part but not
all of any such building or land, however, is leased or otherwise is a
source of revenue or profit, and the remainder of such building or land is used
by any organization exempted from taxation pursuant to this chapter for its
purposes, only such portion as is so leased or is otherwise a source of
profit or revenue shall be liable for taxation.
B. In assessing any building and the land it occupies pursuant to subsection A,
the assessing officer shall only assess for taxation that portion of the
property subject to any such lease or otherwise as is a source of
profit or revenue and the tax shall be computed on the basis of the ratio of
the space subject to any such lease or otherwise as is a source
of profit or revenue to the entire property. When any such property is leased
for portions of a year the tax shall be computed on the basis of the average
use of such property for the preceding year.
C. In determining whether any building or land, or part thereof, is a source of revenue or profit, rent from the lease of the property applied to reduce indebtedness against the property by payment of the principal of an outstanding bond or note held by a political subdivision of the Commonwealth shall not constitute revenue or profit, provided that the property is leased to a lessee who is exempt from taxation pursuant to § 501 (c) (3) of the Internal Revenue Code and is used by such lessee exclusively for charitable purposes.