Tax Law

The Law
Personal Property of Television and Radio Broadcasting Companies are taxed under Sections 58.1-3507 and 58.1-1101 Va. Code Annotated. Section 58.1-1101 allocates to State taxation only (and not local) tangible personal property of television and radio broadcasting businesses except for machinery and tools used in a broadcasting business. Machinery and tools as used in Section 58.1-1101 has been defined by the Supreme Court of Virginia as only those items of machinery which are used directly in the [broadcasting] business.

Unfortunately the localities (and some broadcasters) are having a hard time figuring that out. We have seen localities make machinery and tools assessments against items called "leasehold improvements". Such items to be leasehold improvements usually constitute realty and aren't even tangible personal property. For example the Attorney General of Virginia has opined that house trailers affixed to real property are to be assessed as real property. Other courts have ruled that partitions affixed to a building are real property and not manufacturing equipment. Thus, leasehold improvements are not taxable as machinery and tools.