Federal Personal Property Tax Relief for Military Families

By: Andrew McRoberts, Editor. This was posted Friday, November 13th, 2009

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The LGA is full of wonderful local government attorneys who provide help to one another. I received the following from Ray Warren, Legal Counsel to the Arlington County Commissioner of the Revenue, who agreed to have it reprinted on this blog because of its obvious impact on local government taxation. Thanks, Ray!

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Thanks to attorney and LGA member Jeff Scharf for alerting me about this. I have now read the legislation myself along with supporting documents.

On Veteran’s Day President Obama signed an amendment to the Servicemembers Civil Relief Act. [S 475.] For local governments the main impact is to treat vehicles owned jointly by spouses and servicemembers or individually by the spouse the same as vehicles owned by servicemembers so long as the member and his/her spouse share a household. This will particularly affect jurisdictions with a large military presence. Most of us have been taxing vehicles owned jointly by a servicemember and his/her spouse if the spouse was not also a servicemember.

The language of the Act will now read: ” [50 USC app. 571] Sec 511 (d) [formerly c] (1) The personal property of a servicemember or the spouse of a service member shall not be deemed to be located or present in, or to have situs for taxation in, the jurisdiction in which the servicemember is serving in compliance with military orders.”

The act would appear to exclude legally separated servicemembers. They must share a residence or domicile, though it appears that can be in the “home” state of the military member. In my view physical separation due to the stationing in Virginia does not defeat this as the servicemember is deemed to still reside back in the home state domicile as well.

The Department of Taxation has a bulletin on this, click here.

But caution in reading the TAX bulletin, my reading of the bill does not indicate that property taxes are retroactively relieved for 2009. The TAX bulletin says the Act is effective for tax years 2009 and thereafter, but this appears to apply only to income taxes. It appears that the Act is effective for non income tax purposes when signed (November 11, 2009).

For non prorating jurisdiction that means no liability for military spouses’ vehicles and jointly owned vehicles for 2010. For prorating jurisdictions a request for relief for the period after November 11, 2009 should probably be honored if already paid and requested.

Here is a link to the new Act, click here [general information, as well as a summary and full text of S 475].

Ray

Raymond A. (Ray) Warren
Legal Counsel/ Deputy Commissioner
Office of the Commissioner of Revenue
2100 Clarendon Blvd, Suite 200
Arlington, VA 22201
Phone 703-228-3028
Fax 703-228-7048

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Comments:

  • Could you please publish or let me know which counties in Virginia are prorating jurisdictions?

    Posted by: chris | November 23rd, 2009 at 12:55 pm
     
  • I’ve been interested in taxations for lengthier then I care to acknowledge, both on the private side (all my working lifetime!!) and from a legal point of view since satisfying the bar and pursuing tax law. I’ve rendered a lot of advice and rectified a lot of wrongs, and I must say that what you’ve put up makes impeccable sense. Please continue the good work – the more people know the better they’ll be outfitted to handle with the tax man, and that’s what it’s all about.

    Posted by: Tax Guy | November 22nd, 2009 at 11:53 pm
     

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