Code of Virginia

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Code of Virginia
Title 58.1. Taxation
Chapter 39. Enforcement, Collection, Refunds, Remedies and Review of Local Taxes
5/12/2021

Article 3. Collection by Distress, Suit, Lien, Etc.

§ 58.1-3940. Limitation on collection of local taxes.

A. Except as otherwise specifically provided, collection of local taxes shall only be enforceable for five years following December 31 of the year for which such taxes were assessed.

B. Real property taxes shall be enforceable by sale under Article 4 (§ 58.1-3965 et seq.) of the property on which such taxes were assessed and by other means permitted under this chapter for 20 years after December 31 of the year for which such taxes were assessed, provided that whenever taxes or portions of taxes that would otherwise be due have been deferred pursuant to an ordinance enacted in conformity with Article 2 (§ 58.1-3210 et seq.) or Article 2.1 (§ 58.1-3219 et seq.) of Chapter 32 of this title, the statute of limitations provided by this subsection shall be tolled with respect to taxes deferred during the pendency of such deferral.

C. The limitation periods provided in subsections A and B of this section shall not apply to taxes or other charges that have been reduced to judgment or a judgment lien resulting from a suit to collect taxes or other charges, which may be collected by any means provided in this chapter or any means provided by general law for the collection of judgments so long as the judgment or judgment lien remains enforceable pursuant to general law.

D. The statutes of limitations established by this section shall be tolled, with respect to any tax obligation or tax lien not discharged or otherwise relieved or rendered unenforceable pursuant to applicable law, for any period during which all or substantially all of the assets or estate of the taxpayer are subject to the control or custody of any court or receiver, including without limitation any United States Bankruptcy Court.

Code 1950, §§ 58-967, 58-1019, 58-1021; 1971, Ex. Sess., c. 6; 1984, c. 675; 1994, c. 209; 1996, c. 323; 1998, c. 648; 2002, c. 64; 2003, c. 214.

§ 58.1-3941. What may be distrained for taxes.

Any goods or chattels, money and bank notes in the county, city or town belonging to the person or estate assessed with taxes, levies or other charges collected by the treasurer may be distrained therefor by the treasurer, sheriff, constable or collector. Property subject to levy or distress for taxes shall be liable to levy or distress in the hands of any person for taxes, penalties and interest thereon, except that any highway vehicle as defined herein purchased by a bona fide purchaser for value shall not be liable to levy or distress for such taxes unless the purchaser knew at the time of purchase that the taxes had been specifically assessed against such vehicle.

Property on which taxes were specifically assessed, whether assessed per item or in bulk shall be subject to distress after it passes into the hands of a bona fide purchaser for value.

As used in this section, "highway vehicle" means any vehicle operated, or intended to be operated, on a highway. The term shall not include: (i) farm machinery, including farm machinery designed for off-road use but capable of movement on roads at low speeds; (ii) a vehicle operated on rails; (iii) machinery designed principally for off-road use; (iv) self-propelled equipment manufactured for a specific off-road purpose, which is used on a job site and the movement of which on any highway is incidental to the purpose for which it was designed and manufactured; or (v) a vehicle operated on the highway and exempt from registration requirements pursuant to §§ 46.2-663 through 46.2-667 and 46.2-669 through 46.2-683.

Code 1950, § 58-1001; 1971, Ex. Sess., c. 155; 1983, c. 498; 1984, c. 675; 1996, c. 323; 1997, cc. 496, 731; 2005, c. 59.

§ 58.1-3942. Security interests no bar to distress.

A. No security interest in goods or chattels shall prevent the same from being distrained and sold for taxes or levies assessed thereon, no matter in whose possession they may be found.

B. Prior to such sale for distress, the treasurer, sheriff, constable or collector, or other party conducting the sale shall give notice to any secured party of record as his name and address shall appear on the records of the Department of Motor Vehicles, the Department of Wildlife Resources, the State Corporation Commission, or in the office of the clerk of any circuit court where the debtor has resided to the knowledge of the party to whom the tax is owing during a one-year period prior to the sale. Notice shall also be given to any secured party of whom the party to whom the tax is owing shall have knowledge.

C. A security interest perfected prior to any distraint for taxes shall have priority over all taxes, except those specifically assessed either per item or in bulk against the goods and chattels so assessed. Taxes specifically assessed either per item or in bulk against goods and chattels shall constitute a lien against the property so assessed and shall have priority over all security interests. For purposes of this section, a merchant's capital tax shall be deemed to be specifically assessed against all inventory in the merchant's possession at the time of distraint, or at the time such inventory is repossessed by the holder of a security interest therein. For purposes of this section, taxes specifically assessed in bulk means an assessment against the specific class of property distrained.

D. The title conveyed to the purchaser of goods and chattels at a sale for taxes specifically assessed either per item or in bulk against such goods and chattels distrained shall be free of all claims of any creditor, including the claims of any secured party of record, provided that notice was given to such creditor as required by subsection B. The person conducting the sale shall apply the proceeds of the sale first to unpaid taxes, penalty, and accrued interest, and then to the claims of secured parties of record, in the order of their priority, before delivering any sum remaining to the person or estate assessed with taxes.

E. Notwithstanding any provision of this section to the contrary, no highway vehicle as defined in § 58.1-3941 purchased by a bona fide purchaser for value from the person or estate assessed with taxes shall be liable to levy or distress for such taxes unless the purchaser knew at the time of purchase that the taxes had been specifically assessed against such vehicle.

F. The purchaser of a motor vehicle sold under this section shall receive a sales receipt and an affidavit of the treasurer, sheriff, constable or collector, or other party conducting the sale affirming that he has complied with the provisions of this section, and shall be entitled to apply to and receive from the Department of Motor Vehicles a certificate of title and registration card for the vehicle.

Code 1950, § 58-1009; 1966, c. 559; 1981, c. 153; 1983, c. 498; 1984, c. 675; 1990, c. 553; 1996, c. 732; 1997, c. 731; 1999, c. 299; 2001, c. 801; 2005, c. 59; 2012, c. 623; 2020, c. 958.

§ 58.1-3943. Distraint on property of tenant or of owner of tract who has sold part thereof.

When rent is payable in a share of a crop, the share of the crop belonging to a landlord who owes taxes, but only that share, shall be liable to levy. When taxes are assessed wholly to one person on a tract or lot, part of which has become the freehold of another by a title recorded before the commencement of the year for which such taxes are assessed, the property belonging to the former shall not be distrained for more than a due proportion of the taxes.

Code 1950, § 58-1006; 1984, c. 675.

§ 58.1-3944. Tenant paying taxes or levies to have credit out of rents.

A tenant from whom payment is obtained, by distress or otherwise, of taxes or other charges due from a person under whom he holds, shall have credit for the same against such person out of the rents he may owe him, except when the tenant is bound to pay such taxes or other charges by an express contract with such person.

Code 1950, § 58-1013; 1984, c. 675; 2002, c. 64.

§ 58.1-3945. Where land lies partly in one county and partly in another.

When taxes or levies are assessed on a tract of land lying partly in one county or city and partly in another county or city the treasurer of the county or city in which the taxes or levies are so assessed may distrain on the part of the land lying in the other county or city in the same manner as if such part was in his own county or city.

Code 1950, § 58-1007; 1984, c. 675.

§ 58.1-3946. When owner a nonresident of county, city or town where land lies.

When property subject to taxation is located in a county, city or town different from that in which the owner of such property resides, or when a person assessed with any taxes, levies and other charges before paying the same removes from the county, city or town in which the assessment was made, the treasurer shall have the same remedies for the collection of all such taxes, levies and other charges in all respects as if the person owing the same resided in the officer's own county, city or town; or the treasurer may transfer to the treasurer of the county, city or town in which such person resides the tickets for taxation and levies and the statements for other charges against such person or property and the last-named officer shall proceed to collect the same and pay the proceeds to the former officer.

Code 1950, § 58-1008; 1984, c. 675; 2002, c. 64.

§ 58.1-3947. Lease of real estate for collection of taxes.

Any real estate in the county, city or town belonging to the person or estate assessed with taxes due on such real estate may be rented or leased by the treasurer, sheriff, constable or collector, privately or at public outcry, after due publication, in the discretion of such treasurer, sheriff, constable or collector, either at the front door of the courthouse or on the premises or at some public place in the community where the premises are situated, after giving not less than fifteen days' notice by printed or written notices posted at the front door of the courthouse and at three or more places in the neighborhood of the real estate to be leased. Such leasing shall be for a term not exceeding one year and for cash sufficient to pay the taxes due on the real estate so rented and the costs and charges of advertising and leasing. When a lease is effected, the treasurer, collector, sheriff or constable leasing such real estate shall put the lessee in possession thereof and for such purpose shall have like powers as those exercised by a sheriff acting under a writ of possession or writ of eviction.

Code 1950, § 58-1003; 1971, Ex. Sess., c. 155; 1984, c. 675; 2019, cc. 180, 700.

§ 58.1-3948. Notice to tenant prior to such leasing.

When real estate is advertised for leasing for the taxes and there is any tenant in possession of the property so advertised, then the treasurer, sheriff, constable, collector or other collecting officer making the lease shall serve upon such tenant, at least fifteen days prior to the day of leasing, a copy of the notice of leasing. This service shall be in conformity with §§ 8.01-285 through 8.01-295.

Code 1950, § 58-1004; 1971, Ex. Sess., c. 155; 1984, c. 675.

§ 58.1-3949. Reserved.

Reserved.

§ 58.1-3952. Collection out of estate in hands of or debts due by third party.

A. The treasurer or other tax collector of any county, city or town may apply in writing to any person indebted to or having in his hands estate of a taxpayer or other debtor for payment of taxes, or other charges collected by the treasurer, more than thirty days delinquent out of such debt or estate. Payment by such person of such taxes, penalties and interest, or other charges either in whole or in part, shall entitle him to a credit against such debt or estate. The taxes, penalties and interest, or other charges shall constitute a lien on the debt or estate due the taxpayer or other debtor from the time the application is received. For each application served the person applied to shall be entitled to a fee of twenty dollars which shall constitute a charge or credit against the debt to or estate of the taxpayer or other debtor. The treasurer or collector shall send a copy of the application to the taxpayer or other debtor, with a notice informing him of the remedies provided in this chapter.

If the person applied to does not pay so much as ought to be recovered out of the debt or estate, the treasurer or collector shall procure a summons directing such person to appear before the appropriate court, where proper payment may be enforced. Any person so summoned shall have the same rights of removal and appeal as are provided by law for the enforcement of demands between individuals. For purposes of this section, the term "person" shall include but shall not be limited to individuals, corporations, partnerships, institutions, and other such entities, as well as the Commonwealth and its agencies and political subdivisions. However, in no event shall the Commonwealth, its agencies, or its political subdivisions incur any liability for the failure to pay the treasurer's or other tax collector's application under this section.

B. Unless otherwise exempted, the wages and salaries of all employees of this Commonwealth, other than state officers, shall be subject to this section. Whenever the salary or wages of such employees as above mentioned shall be so attached, the application shall be mailed to the debtor and to the officer or supervisor who is head of the department, agency, or institution where the employee is employed, or other officer through whom the debtor's salary or wages is paid, provided that process shall not be served upon the State Treasurer or the State Comptroller except as to employees of their respective departments, and upon such service the officer or supervisor shall, on or before the return day of the application, transmit to the treasurer or other tax collector issuing the application a certificate showing the amount due from the Commonwealth to such debtor, up to the return day of the application, which amount the officer or supervisor shall hold subject to further instruction from the treasurer or other tax collector. However, in no case shall the officer or supervisor hold more than the sum of taxes, penalties and interest, and other charges stated in the application. Such certificate shall be evidence of all facts therein stated, unless a court of appropriate jurisdiction directs that the deposition of the officer or supervisor, or such other officer through whom the debtor's salary or wages be paid, be taken, in which event the deposition of the officer or supervisor shall be taken in his office and returned to the clerk of the court in which the summons is, just as other depositions are returned, and in no such case shall the officer or supervisor be required to leave his office to testify. In all proceedings under this section, the amount found to be due the debtor by the Commonwealth shall be paid as directed by the court.

Code 1950, § 58-1010; 1960, c. 573; 1983, c. 481; 1984, c. 675; 1991, c. 445; 1994, c. 153; 1997, c. 496; 2002, c. 64.

§ 58.1-3953. Additional proceedings for the collection of taxes; jurisdiction and venue.

The payment of any county, city or town taxes, may, in addition to the other remedies provided in this chapter, be enforced by action at law, suit in equity or by attachment in the same manner, to the same extent and with the same rights of appeal as now exist or may hereafter be provided by law for the enforcement of demands between individuals. The venue for any such proceeding under this section shall be as specified in subdivision 13 a of § 8.01-261.

Code 1950, § 58-1014; 1954, c. 333; 1977, c. 624; 1981, c. 421; 1984, c. 675.

§ 58.1-3954. Procedure in such suits.

Such proceedings shall be instituted and conducted in the name of the county, city, or town in which such taxes are assessed, at the direction of the governing body of the county, city or town, by such attorney as the governing body may employ or retain for the purpose.

Code 1950, § 58-1016; 1954, c. 333; 1984, c. 675; 1993, c. 27.

§ 58.1-3955. Judgment or decree; effect thereof; enforcement.

In any proceeding under § 58.1-3953 the court shall have the power to determine the proper taxes, penalties and interest with which upon a correct assessment the taxpayer is chargeable for any year or years not barred by the statute of limitations at the time the proceedings were instituted, and order payment thereof. If any taxes of which collection is sought have been erroneously charged, the court may order exoneration thereof. Payment of such judgment or decree shall be enforced against the taxpayer in the same manner that it could be enforced in a proceeding between individuals.

Code 1950, § 58-1017; 1984, c. 675.

§ 58.1-3956. Collection in foreign jurisdiction.

When after the rendition of such a judgment or decree against a defendant it seems to the attorney for the county, city or town having charge thereof that there may not be found within the Commonwealth sufficient property of the defendant out of which the same may be enforced, but that the same could be enforced in some other jurisdiction, it shall be his duty to institute in some appropriate court, state or federal, in such foreign jurisdiction, any appropriate proceedings to enforce therein the payment of such judgment.

Code 1950, § 58-1018; 1984, c. 675.

§ 58.1-3957. Payments to attorneys or others for collection.

A. Whenever the services of any attorney employed to collect taxes which are a lien on real estate result in the collection of any such tax, such attorney may be compensated for his services whether or not any suit is instituted for the collection of the tax or the sale of the real estate.

B. No payment or compensation on any taxpayer account shall be made to any attorney, collection agency, or other person employed to collect delinquent taxes on amounts received from the Department of Taxation and collected through the Setoff Debt Collection Act; however, this limitation shall not apply to contracts or agreements entered into prior to July 1, 1990.

Code 1950, § 58-1020; 1973, c. 467; 1984, c. 675; 1990, c. 935.

§ 58.1-3958. Payment of administrative costs, etc.

The governing body of any county, city or town may impose, upon each person chargeable with delinquent taxes or other delinquent charges, fees to cover the administrative costs and reasonable attorney's or collection agency's fees actually contracted for. The attorney's or collection agency's fees shall not exceed 20 percent of the taxes or other charges so collected. The administrative costs shall be in addition to all penalties and interest, and shall not exceed $30 for taxes or other charges collected subsequent to 30 or more days after notice of delinquent taxes or charges pursuant to § 58.1-3919 but prior to the taking of any judgment with respect to such delinquent taxes or charges, and $35 for taxes or other charges collected subsequent to judgment. If the collection activity is to collect on a nuisance abatement lien, the fee for administrative costs shall be $150 or 25 percent of the cost, whichever is less; however, in no event shall the fee be less than $25.

No tax assessment or tax bill shall be deemed delinquent and subject to the collection procedures prescribed herein during the pendency of any administrative appeal under § 58.1-3980, so long as the appeal is filed within 90 days of the date of the assessment, and for 30 days after the date of the final determination of the appeal, provided that nothing in this paragraph shall be construed to preclude the assessment or refund, following the final determination of such appeal, of such interest as otherwise may be provided by general law as to that portion of a tax bill that has remained unpaid or was overpaid during the pendency of such appeal and is determined in such appeal to be properly due and owing.

Code 1950, § 58-1020.1; 1982, c. 620; 1984, c. 675; 1991, c. 271; 1994, c. 932; 1995, c. 395; 1997, c. 496; 1998, c. 648; 1999, c. 389; 2000, cc. 389, 453; 2003, c. 170.

§ 58.1-3959. Petition to ascertain delinquent taxes; exoneration from lien.

Any person interested in real estate may file a petition in the circuit court of the county or city wherein the assessment of taxes was made, for the purpose of having ascertained any and all delinquent taxes due upon such real estate or any delinquent taxes imposed under the authority of § 58.1-3712, 58.1-3713, 58.1-3713.4, or 58.1-3741. A copy of the petition shall be served upon the county or city attorney, or if there is none, on the attorney for the Commonwealth at least ten days before the date upon which the petition specifies the court shall be asked to hear the petition. The court may refer the question to a commissioner in chancery for report thereon. The court shall enter final judgment determining what, if any, taxes are due upon the real estate, including any taxes covered by the lien described in § 58.1-3745, mentioned in the petition. Upon the payment of any amount so ascertained by the court, and the costs of the proceeding, the land shall be held free and clear of any such tax lien. No writ tax shall be charged. The clerk shall be entitled to a fee of one dollar which, together with other costs, including such fee as the court may deem proper to allow the commissioner in chancery, shall be paid by the petitioner.

Code 1950, § 58-1025; 1984, c. 675; 2001, c. 462; 2013, cc. 305, 618.

§ 58.1-3960. Validation of certain tax deeds made under repealed § 58-1052 or § 58-1091.

All deeds heretofore made by a clerk of court to a purchaser under the provisions of repealed § 58-1052 or § 58-1091 of the Code of Virginia, which deeds have been recorded for fifteen years or more in the clerk's office of the county or city wherein the land conveyed thereby is located, are hereby declared to be valid in all respects and for all purposes except as hereinafter provided as to persons under disability.

No former owner, his heirs or assigns shall make an entry on or bring an action to recover any land conveyed by such a deed or institute any suit to set aside such a deed, except within fifteen years next after the time such a deed from the clerk of court has been duly admitted to record.

An infant or insane person who owned land at the time the same was returned delinquent and sold on account of the default in paying the taxes assessed thereon, which land has been conveyed by a clerk of court by such deed, may redeem the same in accordance with the provisions of law within two years after the removal of disability; but in no case shall the right to redeem be allowed any person after the lapse of twenty years from the day of such sale.

Nothing herein shall be construed so as to affect or divert the title of a tenant in reversion or remainder to any real estate which has been returned delinquent and sold on account of the default of the tenant for life in paying the taxes assessed thereon or to affect or divert the title of a cotenant, joint tenant or coparceners, when the grantee in such deed is one of the cotenants, joint tenants or coparceners.

Code 1950, § 58-1026.1; 1974, c. 306; 1984, c. 675.

§ 58.1-3961. Assessment not invalid unless rights prejudiced by error.

No assessment of property, other than real property, shall be invalid because of any error, omission or irregularity by the commissioner of the revenue or other assessing officer in charging such property in the personal property or other tax book, unless it is shown by the person contesting any such assessment that such error, omission or irregularity has operated to prejudice his rights.

1995, c. 239.

§ 58.1-3962. Reserved.

Reserved.