Keeping everyone honest

 

Goochland supervisors faced a full agenda on August 1 after starting at 7 pm. to allow the board to attend National Night Out.

The board considered adding an ordinance to the section on taxation in the county code.

County Attorney Tara McGee explained that she has been working with offices of the Assessor and Commissioner of the Revenue for the past two years to understand the source of tax exemptions for real and personal property in Goochland. She said that non-profit organizations classified by the IRS as “501 (c) (3)” are exempt from income tax, but not automatically from other taxes levied at the state and local level.

Only certain entities can be exempt from real and personal property taxes in Virginia, McGee said. The Constitution of the Commonwealth exempts churches, schools, and non-profit cemeteries as tax exempt. Over the years, the General Assembly, she said, identified other categories that it believes come under the “religious, charitable, and beneficial” umbrella and granted a thousand individual tax exemption designations. These include Goochland Cares and the Goochland Volunteer Fire-Rescue Association, which owns five county fire-rescue stations.

The other caveat for the exemption under Virgina law is that the property must be actively and exclusively in use for the stated non-profit purpose. The goal of the ordinance is to ensure that all real property and vehicles owned by non-profit entities is used to fulfill the mission of the organization and not generate otherwise taxable revenue.

The proposed ordinance requires entities eligible under state law for tax exemptions for real and personal property to file an application including documents and information to support those tax exemptions. Application renewals would be filed every three years. The first filing deadline, should the ordinance be approved, will be December 31, 2023.

The process would be similar to establishing eligibility for land use taxation or the elderly and disabled tax exemption. The ordinance will demonstrate to the taxpayers that exempt entities are entitled to their relief and that local government is being good stewards of public funds, McGee said.

The proposed ordinance applies only to non-profits who own real estate or garage vehicles in Goochland County. Non-compliance could result in loss of tax-exempt status. Both the assessor and Commissioner of the Revenue will work with entities covered by the ordinance to help with compliance

The Goochland Assessor, said McGee, has accounts for 74 non-profit entities with real estate valued at $248 million that has not been taxed. The Commissioner of the Revenue has accounts for 45 tax exempt entities, some of which may be on the assessor’s list, which have vehicles valued at $912k that have been carried as tax exempt.

Following a meeting held earlier this year on the matter, the compliance application has been whittled down from eight pages to two.

During the public hearing, however, a representative of Dover Baptist Church objected to the requirement that by-laws be submitted as part of the compliance process because by-laws of religious organizations could include a statement of faith that could give local government the power to deny tax exempt status to a church if the views of the government are in conflict with that of the religious organization.

“The framers of our constitution were acutely aware how governments in Europe had sought to control and manipulate religious practices in churches. They resolved that America be different. Bureaucratic efforts to subject religious beliefs to verification have no place in a free country,” the Dover representative said.

McGee said that if by-laws are not publicly published, a church could instead make a certifying statement to comply with the ordinance.  

The supervisors wanted to see the form used to certify exemptions and asked McGee to include a simple appeal process in the ordinance should an entity be refused tax exempt status. They voted to defer a decision on the matter until their September 5 meeting, at which time another public hearing will be held on the revised ordinance.