Torian Cuts Red Tape for Seniors

-Keith Walker
News & Messenger
Published: January 29, 2011

Del. Luke Torian, D-52nd, had a constituent who got wrapped up in a little tax snafu and wound up having to go through some gyrations to avoid paying what he and Torian thought were unwarranted taxes on a car.

John Lewin and his wife had their assets in a living trust.

“It makes it a lot easier for the heirs to deal with the legal issues following the death of one or both parents,” Lewin said of a living trust.

But the problem with having cars registered in a trust is that the Division of Motor Vehicles sees them as business assets, Lewin said.

With the cars in the trust, the amount he owed on his tax bill was determined based on 100 percent of the car’s value.

Personal property taxes are calculated on 25 percent of a vehicles’ value rather than the 100 percent the county uses to calculate taxes on business vehicles.

“The problem with the Division of Motor Vehicles code is that they only recognize vehicles registered under a trust for business use,” Lewin said.

Lewin was able to counter the higher tax bill by going to the county and telling them that the cars registered in the trust were personal property rather than business property.

“If you go to the county and say ‘Wait a minute, these vehicles are for private use,’ the county has no problem,” he said. “It works. The problem is the DMV code needs to recognize that certain trusts are for personal use.”

So Torian introduced House Bill 2244, which provides that the Department of Motor Vehicles conveys information to commissioners of the revenue about privately owned vehicles that qualify as personal property under the Personal Property Tax Relief Act.

Torian’s bill, which passed on the floor of the Virginia House of Delegates on Friday, would ensure that commissioners of the revenue know which vehicles are exempt from the business rates, because they would be notified by the DMV.

“What happens is that this requires the DMV to have as part of its information gathering the stipulation where people will be able to stipulate that they have their vehicle registered [in a trust]and it’s used for personal use and not for business use,” Torian said.

Torian’s bill still has to make it through the Virginia Senate before it becomes law.

Once bills pass the House of Delegates, for instance, they go to committees in the Senate. If they pass the Senate committees, where they can be altered, they are sent to the Senate floor for passage. Bills that pass the Senate and are reconciled with the bills from the house, go to the governor’s desk for signature or veto.

The process is mirrored in the Senate.

Senior reporter Keith Walker can be reached at 703-369-6751.

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