PE To Axe Tax?

Published 4:31 pm Tuesday, October 19, 2010

PRINCE EDWARD – County supervisors-following the suggestion of Leigh District Supervisor Don Gantt last Tuesday-voted, effective January 1, 2011, to amend the machinery and tools tax, moving it from $4.20 to zero and to correct the County's website.

The change, approved with Farmville District Supervisor Mattie Wiley casting the lone opposing vote, would mean about $30,000 less for the County, but it may not extend to those Gantt would like to reach.

Gantt, in the October 12 meeting, said that he had talked to two well drillers who are thinking about selling their machine and renting, paying someone to come from outside the county and drill.

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“I talked to excavators that are parking their machine and going to work elsewhere,” Gantt said. “It's on and on and on and these guys are at the end of it. They fought it and fought it and fought it.”

Gantt said he looked at the budget and that it looks like they should have between a $200,000-$300,000 surplus at the end of the year. There's some other things looking at the board packet, he said, where they will pick up some additional funds. He asked that they do away with the machinery and tools tax.

The board, after some discussion, effectively did that for the coming year.

Still, the board's action may not impact in the desired manner.

“It is manufacturing,” County Administrator Wade Bartlett later told The Herald, explaining the machinery and tools tax. “In other words, you've got to make something.”

So it's not a motor grader. That, he believed is classified as heavy construction equipment.

Or a different category.

“We've got to clarify what it is that the board wants and then, once it's clarified, then we will look at how…we can accomplish the goals of the board,” Bartlett said.

The County Administrator has budgeted $30,000 for the coming year from the machinery and tools tax category and Bartlett said that it's been going consistently down, noting that they just don't have the manufacturing they used to in this area.

While the machinery and tools tax can vary from county to county, in Prince Edward the assessment is ten percent of the original cost, according to Bartlett.

If the applicable equipment cost $100,000, the tax would be on $10,000-lowering the effective rate of the tax.

The assessment rate on business heavy equipment is twenty percent and follows the same formula (and does not depreciate). The County has a levy of $60,000 for the tax.