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1996 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 58.1-3203 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-3203. Taxation of certain leasehold interests.
All leasehold interests in real property which is exempt from assessment for taxation from the owner shall be assessed for local taxation to the lessee. If the remaining term of the lease is fifty years or more, or the lease permits the lessee to acquire the real property for a nominal sum at the completion of the term, such leasehold interest shall be assessed as if the lessee were the owner. Otherwise, such assessment shall be reduced two percent for each year that the remainder of such term is less than fifty years; however, no such assessment shall be reduced more than eighty-five percent. If the lessee has a right to renew without the consent of the lessor, the term of such lease shall be the sum of the original lease term plus all such renewal terms.
When any real property is exempt from taxation by designation under
Section 6 (a) (1) or (2) or by designation under Section 6 (a)
(6) of Article X of the Constitution of Virginia, the leasehold interest in
such property may also be exempt from taxation, provided that the property is
leased to a lessee who is exempt from taxation pursuant to § 501 (c) of
the Internal Revenue Code and is used exclusively by such lessee primarily for
charitable, literary, scientific, or educational purposes. No leasehold
interest of tax exempt property of a governmental agency shall be subject to
assessment for local property tax purposes where the property is leased to a
public service corporation or subsidiary thereof or a nonstock, nonprofit
corporation whose occupation, use or operation of the tax exempt property is in
aid of or promotes the governmental purposes set out in Chapter 10 (§
62.1-128 et seq.) of Title 62.1. The provisions of this section shall not apply
to any leasehold interests exempted or partially exempted by other provisions
of law.