Under current law, wind turbine projects with more than 25 megawatts (MW) in generating capacity may be taxed locally at a rate that exceeds the real estate rate, but that does not exceed the Machinery and Tool (M&T) tax rate. HB 1327 (Austin) modifies this authority to allow a locality to exceed the real estate rate by up to $0.20 per $100 of assessed value.
The effect of this change on local revenues will depend on each county’s specific real estate and M&T rates. To date, no projects greater than 25 MW have been built in Virginia, although one has been approved to proceed in Botetourt County. The bill is supported by APEX Clean Energy, the developer of the Botetourt project. While the County approved a tax rate on wind turbines of no more than $0.20 than the real estate rate, APEX sought the legislation to prevent future hikes in the rate allowable under existing law. This is because Botetourt’s M&T rate is significantly higher than its current real estate rate.
VACo has concerns that this proposed change could limit the flexibility of Counties that might consider large wind projects in the future to establish appropriate tax rates for this type of property and is seeking changes to the bill to limit its potential impacts. The bill has passed the House and been referred to the Senate Finance and Appropriations Committee.
VACo Contacts: Joe Lerch, AICP and Katie Boyle