Did Virginia's new disabled-veterans property tax exemption apply to bills due mid-year in 2011 in cities with a July tax year?

Plain-English summary

Hampton Commissioner of the Revenue Mugler asked the AG to settle a timing question that mattered to both the city and to disabled veterans in Hampton. HB 1645 and SB 987 (the bills exempting the real property of veterans with a 100% service-connected, permanent, and total disability who occupy it as their principal residence) had an emergency enactment clause, meaning the laws would take effect immediately on passage. But the bills also said the exemption applied "for tax years beginning on or after January 1, 2011."

The wrinkle: Hampton's tax year does not begin on January 1. It begins on July 1. The first half of Hampton's tax year ran July 1, 2010 through December 31, 2010. The second half ran January 1 through June 30, 2011, with the bill due June 5, 2011. Did "tax years beginning on or after January 1, 2011" mean the new exemption reached that June 2011 payment?

The AG said no. The plain text of the bill keyed the exemption to the start of a tax year, not the date of an installment payment. Hampton's relevant tax year started July 1, 2010, before January 1, 2011. So even though the June 2011 payment is calendar-2011 money, the tax year of which it is a part predates January 1, 2011 and falls outside the exemption.

The AG reasoned that the emergency enactment clause and the "tax years beginning on or after January 1, 2011" date were two different concepts. The emergency clause governed when the law became operative; the tax-year language governed which tax years it applied to. Both had to be read together. The law was operative in 2011, but its substantive effect started with the next tax year that began on or after January 1, 2011. For Hampton, that would be the tax year beginning July 1, 2011, not the one already in progress.

The result was a practical loss for Hampton-resident disabled veterans waiting for the exemption. Their first taste of relief would not come until the new tax year that started July 1, 2011, even though Virginia voters had already amended the Constitution to authorize the exemption and the General Assembly had passed implementing legislation with emergency status.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The disabled-veterans real estate tax exemption was later codified in the Virginia Code and has been amended since. Anyone analyzing the current scope or effective date for a specific locality should check the current statute and the locality's tax-year calendar.

Common questions

What is a "tax year"?

A tax year is the twelve-month period for which a tax is imposed and assessed. For Virginia real estate, the tax year is set by the locality. Many localities use a calendar year (January 1 to December 31). Hampton uses a fiscal year (July 1 to June 30). The tax bill is typically split into two installments, but the tax year itself is one continuous twelve-month period.

Did the emergency clause not override the tax-year language?

The AG read the two together. The emergency clause says the law is in effect immediately. The tax-year language says the substantive exemption starts with the next qualifying tax year. Both can be true at once. The exemption was legally on the books in 2011, but its bite did not start until the next tax year beginning on or after January 1, 2011.

Would the answer be different in a city with a January tax year?

Yes. In a locality whose tax year begins January 1, 2011 would itself be the first exempt tax year, and both halves of the 2011 bill would benefit from the exemption.

Could Hampton have waived its tax year?

The opinion does not address that. It answers only whether the proposed exemption, by its plain terms, reached the bill due June 5, 2011.

Background and statutory framework

The proposed legislation:

• HB 1645 and SB 987 (2011 Reg. Sess.). Real estate tax exemption for veterans with a 100% service-connected, permanent, and total disability who occupy the property as their principal residence. Applies "for tax years beginning on or after January 1, 2011." Emergency enactment clause.

The structural question:

• Emergency enactment determines when the law is operative.
• "Tax years beginning on or after January 1, 2011" determines which tax years are within the substantive scope.

The factual record:

• Hampton's tax year begins July 1.
• Current tax year (as of the opinion): July 1, 2010 to June 30, 2011.
• Bill timing: split into two halves; second-half payment due June 5, 2011.

The interpretive principle the AG applied: a tax bill that comes due during a tax year is part of that tax year. The bill due June 5, 2011 is part of the tax year that began July 1, 2010. That pre-January 2011 tax year is outside the new exemption.

Citations

• Va. Code § 2.2-505
• HB 1645 (2011 Reg. Sess.)
• SB 987 (2011 Reg. Sess.)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2011/11-017-Mugler.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

March 2, 2011

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

The Honorable Ross A. Mugler
Commissioner of the Revenue
City of Hampton
Post Office Box 636
Hampton, Virginia 23669

Dear Commissioner Mugler:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You inquire whether two bills exempting property for disabled veterans "for tax years beginning on or after January 1, 2011," each containing an emergency enactment clause, would apply to the tax bill due in your locality on June 5, 2011, and which tax bill is assessed for the second half of the tax year that began on July 1, 2010.

Response

It is my opinion that, were it to become law, the exemption at issue would not apply to payments due for the tax year that began on July 1, 2010, including payments due for the second half of the tax year.

Background

House Bill 1645 and Senate Bill 987 would amend the Code of Virginia to exempt from taxation the real property of a veteran who has "a 100 percent service-connected, permanent, and total disability, and who occupies the real property as his principal place of residence." The bills provide that the exemption would apply "for tax years beginning on or after January 1, 2011." The proposed legislation contains an emergency enactment clause, meaning that the proposal would become law from the time of its passage.

Applicable Law and Discussion

Although the proposed legislation would go into effect immediately upon approval by the General Assembly and the Governor due to its emergency enactment clause, by its plain language the law would apply only to "tax years beginning on or after January 1, 2011." The proposed legislation would not apply to a tax year that began before January 1, 2011. You relate that the tax year for the City of Hampton begins on July 1. Therefore, the current tax year began on July 1, 2010, and the proposals by their plain terms would not apply until the following tax year, i.e. a tax year that began "on or after January 1, 2011." The fact that there are two payments made during the course of the tax year does not alter the fact that the tax year began before January 1, 2011. Therefore, I conclude that the second half of the bill for real property of disabled veterans that will come due on June 5, 2011 would not be subject to the exemption until the following tax year.

Conclusion

Accordingly, it is my opinion that, were it to become law, the exemption at issue would not apply to payments due for the tax year that began on July 1, 2010, including payments due for the second half of the tax year.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General