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1997 SESSION

972280633
SENATE JOINT RESOLUTION NO. 385
Senate Amendments in [ ] -- February 4, 1997
Establishing a joint subcommittee to study the advisability of reducing or eliminating the tangible personal property tax in the Commonwealth.
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Patrons-- Colgan, Barry, Benedetti, Bolling, Chichester, Couric, Earley, Edwards, Gartlan, Hanger, Hawkins, Holland, Howell, Lambert, Marsh, Martin, Marye, Maxwell, Miller, K.G., Newman, Norment, Potts, Quayle, Saslaw, Schrock, Stolle, Stosch, Waddell, Walker, Williams and Woods; Delegates: Albo, Brickley, Cooper, Hargrove, Howell, Marshall, McClure, Morgan, Nelms, Parrish, Reid, Rollison and Watkins
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Consent to introduce
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Referred to the Committee on Rules
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WHEREAS, the tangible personal property tax has been administered by counties, cities, and towns in the Commonwealth since 1926; and

WHEREAS, the tangible personal property tax generates over $1 billion annually and is the second largest source of revenue for Virginia's local governments; and

WHEREAS, an analysis of the many classes of personal property reveals that the tangible personal property tax in the Commonwealth is levied primarily on motor vehicles, boats, and aircraft; and

WHEREAS, rapid increases in the costs of the items typically subjected to the tangible personal property tax, notably motor vehicles, have caused many citizens to express concern over the rising rate of increases in tangible personal property tax assessments; and

WHEREAS, the tangible personal property tax generally is required to be paid in a single installment, which creates an undue burden on many taxpayers; and

WHEREAS, the number of classes of tangible personal property, many of which are taxed at a lower rate than the rate on the general classification of personal property applicable to motor vehicles, has increased from 8 in 1979 to 24 in 1995; and

WHEREAS, the proliferation in the number of classes of tangible personal property has compounded the perception that the owners of motor vehicles are required to bear a disproportionate share of the local tax burden; and

WHEREAS, limiting, reducing, or eliminating local taxation of tangible personal property would substantially affect the ability of the counties, cities, and towns of the Commonwealth to raise adequate revenues to provide essential services, unless localities are authorized to implement alternative methods of generating revenue; now, therefore, be it

RESOLVED by the Senate, the House of Delegates concurring, That a joint subcommittee be established to study the advisability of reducing or eliminating the tangible personal property tax in the Commonwealth. In its deliberations, the subcommittee shall examine (i) the fairness of the current system of taxing tangible personal property and (ii) the advantages and disadvantages of any alternative sources of revenue that may be authorized to offset any reduction or elimination of the tangible personal property tax.

The joint subcommittee shall consist of [ nine eleven ] members as follows: five members of the House of Delegates, to be appointed by the Speaker of the House [ , ; ] and four members of the Senate, to be appointed by the Senate Committee on Privileges and Elections [ and one city or county Treasurer and one Commissioner of Revenue appointed by the Senate Committee on Privileges and Elections. ]

The Division of Legislative Services shall provide staff support for the study. All agencies of the Commonwealth shall provide assistance to the joint subcommittee, upon request.

The direct costs of this study shall not exceed [ $8,750 $9,250 ] .

The joint subcommittee shall complete its work in time to submit its findings and recommendations to the Governor and the 1998 Session of the General Assembly as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents.

Implementation of this resolution is subject to subsequent approval and certification by the Joint Rules Committee. The Committee may withhold expenditures or delay the period for the conduct of the study.