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Commonwealth's Counties

Legislation to allow local discretion over certain real property tax exemptions fails

HB 679 (LaRock) addresses a situation created in 2002 when a Constitutional Amendment was approved by voters allowing localities to grant certain real or personal property tax exemptions by ordinance for property used for religious, charitable, or other public purposes, within certain criteria.  Prior to this time, these property tax exemptions were granted by the General Assembly at the request of the locality; a locality could also request the General Assembly to remove the exemptions.  The Constitutional amendment did not provide localities the ability to eliminate exemptions that had been granted before it took effect, so those exemptions in effect on January 1, 2003, may only be repealed by the General Assembly, while those granted after that date may be revoked by local governments.

HB 679, introduced at the request of Frederick County, would repeal the pre-2003 tax exemptions, effective July 1, 2025, and allow localities to opt to continue those exemptions by ordinance.

VACo spoke in favor of the bill, pointing out that decisions about exemptions from a major local revenue source should be made by localities, but, as was the case last year, concern from the nonprofit community about potential loss of their tax exemptions prevailed and the bill was tabled.

VACo Contact:  Katie Boyle

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