58.1-3507 - Certain machinery and tools segregated for local taxation only; notice prior to change in valuation, hearing.
§ 58.1-3507. Certain machinery and tools segregated for local taxation only;notice prior to change in valuation, hearing.
A. Machinery and tools, except idle machinery and tools as defined insubsection D and machinery and equipment used by farm wineries as defined in§ 4.1-100, used in a manufacturing, mining, water well drilling, processingor reprocessing, radio or television broadcasting, dairy, dry cleaning orlaundry business shall be listed and are hereby segregated as a class oftangible personal property separate from all other classes of property andshall be subject to local taxation only. The rate of tax imposed by a county,city or town on such machinery and tools shall not exceed the rate imposedupon the general class of tangible personal property. Idle machinery andtools are taxable as capital under § 58.1-1101.
B. Machinery and tools segregated for local taxation pursuant to subsectionA, other than energy conservation equipment of manufacturers, shall be valuedby means of depreciated cost or a percentage or percentages of original totalcapitalized cost excluding capitalized interest. In valuing machinery andtools, the commissioner of the revenue shall, upon the written request of thetaxpayer, consider any bona fide, independent appraisal presented by thetaxpayer.
Whenever the commissioner of the revenue proposes to change the means ofvaluing machinery and tools, such proposed change shall be published in anewspaper having general circulation in the affected locality at least 30days before the proposed change would take effect and the citizens of thelocality shall be allowed to submit written comments, during the 30-dayperiod, to the commissioner of the revenue regarding the proposed change.
C. All motor vehicles which are registered pursuant to § 46.2-600 with theDepartment of Motor Vehicles and owned by persons engaged in those businessesset forth in subsection A shall be taxed as tangible personal property by thecounty, city or town in accordance with the provisions of this chapter. Allother motor vehicles and delivery equipment owned by persons engaged in thosebusinesses set forth in subsection A shall be included in and taxed asmachinery and tools.
D. "Idle machinery and tools" means machinery and tools that (i) (a) havebeen discontinued in use continuously for at least one year prior to any taxday or (b) on and after January 1, 2007, have been specifically identified inwriting by the taxpayer to the commissioner of the revenue or other assessingofficial, on or before April 1 of such year, as machinery and tools that thetaxpayer intends to withdraw from service not later than the next succeedingtax day and (ii) are not in use on the tax day and no reasonable prospectexists that such machinery and tools will be returned to use during the taxyear.
E. In the event that any machinery and tools taken out of use subsequent toJanuary 1, 2007, are returned to use after having been previously classifiedas idle machinery and tools pursuant to clause (i) (b) of subsection D, thetaxpayer shall identify such machinery and tools to the commissioner of therevenue or other assessing official in writing on or before the next returndue date without extension, and such machinery and tools shall be subject totax in accordance with the procedures provided in § 58.1-3903 in the samemanner as if such machinery and tools had been in use on the tax day of theyear in which such return to use occurs. Any interest otherwise payablepursuant to applicable law or ordinance shall apply to taxes imposed pursuantto this subsection and paid after the due date, without regard to the faultof the taxpayer or lack thereof. Notwithstanding the provisions of §58.1-3903, if the taxpayer has provided timely written notice of return touse in accordance with the provisions of this subsection, no penalty shall belevied with respect to any tax liability arising as a result of the return touse of machinery and tools classified as idle and actually idle prior to suchreturn to use.
F. The Department of Taxation shall promulgate guidelines for the use oflocal governments in applying the provisions of this section related to idlemachinery and tools. In preparing such guidelines, the Department shall notbe subject to the provisions of the Administrative Process Act (§ 2.2-4000 etseq.) for guidelines promulgated on or before January 1, 2008, but shallcooperate with and seek the counsel of local officials and interested groups.After January 1, 2008, such guidelines shall be accorded the weight of aregulation under § 58.1-205 and any amendments to such guidelines shall besubject to the Administrative Process Act.
G. The Tax Commissioner shall have the authority to issue advisory writtenopinions in specific cases to interpret the provisions of this sectionrelated to idle machinery and tools and the guidelines issued pursuant tosubsection F; however, the Tax Commissioner shall not be required tointerpret any local ordinance. The guidelines and opinions issued pursuant tothis section shall not be applicable as an interpretation of any other taxlaw.
(Code 1950, §§ 58-405, 58-831; 1979, c. 351; 1980, c. 412; 1981, c. 145;1982, c. 633; 1983, cc. 552, 555; 1984, cc. 150, 675, 679, 680; 1985, c. 221;1992, c. 680; 1993, cc. 78, 866; 1999, c. 396; 2005, c. 108; 2007, cc. 159,191.)