Board supports bill affecting tax exemptions

Published 4:07 pm Monday, November 19, 2018

SCOPE, STEPS, Crossroads Community Services Board and possibly other area organizations could lose their tax-exempt status in 2024, and the Prince Edward County Board of Supervisors could end up being the governing body to which they would go for possible reinstatement of that status.

At its Nov. 8 meeting, the board unanimously approved the request from Frederick County to produce a resolution supporting Del. David LaRock’s proposed legislation that would repeal the tax-exempt status of organizations listed in Section 58.1- 3650.1 through 58.1-3650.1001 of the Code of Virginia, 1950, as amended, as of July 1, 2024.

At that point in 2024, LaRock’s bill would then move the responsibility of potentially reinstating these organizations’ tax exemption to local governing bodies like the board of supervisors.

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Prince Edward County Administrator Wade Bartlett made it clear at the board meeting that the legislation would not really impact Prince Edward.

“Prior to (2003), if an agency wanted to have tax-exempt status for state and local taxes, then they would have to go to the General Assembly, and they would be approved or not, both houses,” he said at the meeting. “Well, that was it before 2003.”

“In 2003, the constitution of Virginia was changed and pushed that back down to the local governing bodies to make that decision,” Bartlett continued. “But what they didn’t do is change any that were already exempted. So I don’t know how many thousands are in there, but it’s several pages of very small print, and it lists every agency that was approved in the past by the General Assembly — in no order whatsoever.”

He noted that the order is not alphabetic, nor is it even by locality, but it may simply be in chronological order according to when a given agency was approved for exemption.

“I looked through all of those to see which ones (were) in Prince Edward — I could have missed some because there’s so many — and SCOPE, STEPS and Crossroads were listed,” Bartlett said.

He cited that in Frederick County, a retirement community was awarded tax-exempt status in 1986.

Referring to Frederick County officials, he said, “In their minds that creates an unfair advantage, because (organizations) say they’re nonprofit, but some of the most profitable entities I’ve ever seen say they’re nonprofit. So (Frederick County officials) feel like it was an unfair advantage to that one entity compared to others that are in the community, and of course, they’re missing a lot of tax revenue.”

LaRock’s bill would end this situation by establishing a sunset to the General Assembly-given tax exemptions.

“It’d take five years, and then in 2024, it would sunset for the (relevant) ones listed in the Code of Virginia, but those organizations could then go to the local governments, and they could either say ‘yes’ or ‘no,’ depending on whatever their guidelines are,” Bartlett said.

He noted that the issue is not a significant one for Prince Edward County because SCOPE, STEPS and Crossroads are “kind of quasi-governmental and tax-exempt anyway.”

He said the request to provide a resolution in support of LaRock’s bill was sent out to all the counties that are Virginia Association of Counties members.

When asked by a supervisor if he would recommend the board produce a resolution, Bartlett said, “Well, to be a team player, I would recommend it. It’s not really going to impact us. Just in 2024 or shortly before, we would see, I’m sure, those requests from those three organizations, maybe another if I missed one or two.”