Nov 11, 2010
Supreme Court of Virginia upholds NVTA property tax classifications
11 Nov 2010
Posted by VAR
The Northern Virginia Transportation Authority (NVTA) has levied a special tax on certain property owners to finance needed and costly transportation improvements in Northern Virginia, like Metro to Dulles. Here’s the rub: NVTA’s special tax applies only to commercial property owners, and not residential property owners.
This tax irks some commercial property owners in Northern Virginia because, in their view, all those who travel through Northern Virginia benefit from the transportation improvements, but only commercial property owners pay the bills for them. Some of the commercial property owners were so upset over the tax that they sued to have it nullified on the grounds that it violated the “benefit-burden” precedent (i.e. those who benefit from a project should share in the burden of paying for it) set by the Supreme Court of Virginia in a landmark case in 1941.
The case went all the way to the Supreme Court of Virginia which, on November 4, ultimately ruled against the commercial property owners. The special tax will stand, and this ruling gives the General Assembly a clear signal that it may authorize regional authorities to exempt certain classes of property owners from the taxes they levy.
VAR is concerned by the decision because we oppose efforts to establish a separate tax classification for various classes of real property including different classifications for residential and commercial real property. VAR, however, does support legislation to provide voluntary authority to local governments to exempt a percentage of assessed value of residential housing provided any such exemption is targeted to those homeowners whose owner-occupied residential housing is affordable as defined by the locality, or the homeowner’s income falls within that of the population being served by the affordable housing programs of the locality.