The Richmond Virginian. (Richmond, Va.) 1910-1920, 1914-11-10
RECOROATI0N TAX
ON DEEDS Of TRUST
MEASURE TO BE INTRODUCED IN
LEGISLATURE ny HILL
MONTAGUE
COLLECTION CERTAIN
IMPOSSIBLE TO DODGE, AND,
THOUGH TAN REDUCED, REV
ENtEs Will NE GREATER.
COMMISSION SPONSOR,

Members OF the State Tax ooninls-
sion, which recently ended It's work
IF preparing a renort emoodying IN"
fundamentals of reformed tax sys-
tenn for Virginia. will be patrons of a
bill to be introduced at the extra SEES
sion. providing for a recordation tax
on mortgages and deeds If trust ana
abolishing tn, present system of tax
GtiCn Of h $50 Va(ues
II has long been contended by reai
estate men and others that the pres
ent system is q SYSTEM Of double tax
alton and additionally onerous because
of the amount OF the tax. Moreover
1t has been held thar the tax on this
kind of property is impossible of col
lection when owners are dishonest
enough TO dodge IL and that. a. mat
ter of fac, the actual value ~
mortgages and deeds IF trust heId -
far greater than that upon which TAXES
are paid,
The records of the city OF Richmond
were examined by the Tax Comm'ssi@s
while in session here. with the result
that il was shown that the value OF
mortgages ard deeds of trust held here
Is about s14 500. 900, while the amount
returned for taxation was rid uiousiy
small The same condition NistS IN
other parts OF the STATE.
Bill l. Prepared.
Being convinced by study of the
question Ihat n change should be
made and by the public hearings hela
thus summer that there il strong de-
mand for a change of system, Hilt
Mcnta que, secretary "a he c'nms-
sion. and otter members OF the COM
mission. hay prepared q MORTGAGE
tax law. which Nj Montague wsH .,r'
sent 10 the General Assembly when
At meets in extra session mex. January
on call of the governor.
4 Briefly the bill provides tor tax
/ If thirty-tive cents on the hundred dol
lars on all mortgages and deeds ~
trust, the tax to be paid when the
papers are recorded. The tax is en-
tirely on the principal of the loan arft
not on the interest. The income frem
this source ja to ne segregated Tor
State purposes and Is imposed in Hehs
Of all other taxes on such property.
The tax Is to be paid TO the clerk OF
the court and goes direct TO the state.
and Will mot GO through the hands or
the commissioners of revenue and
treasureFs thus saving the State fees
and other expenses Receipts for the
taxes paid will be stamped on the
back of the decd. thus facilitating mai
tiers when the holder wishes To dispose
of them. The law goes into effect on
July J., 1915, If adopted, but those
( holding dee. is of trust already record
and become exempt from all other
taxes.
The objection that. the recordation
tax would be prohibitiye in the case OF
large corporations making great loans
for lengthy periods is met in the bill
/ by limiting the tax to those deeds o.
/ trust and mortgages whose due date
! is five years or less.
Is Tax Reduction.
Under this law the tax such
property is n great reduction unders
that now imposed. For instance.
man loaning 5000 would have to pay
s1T5 on 500 or $3.50. il he paid ar
all which, in fact. many do not now
/ do, lodging the assessor easily tnde-
the proposed law he would pay thirty
Ave cents on the $780, or $3.50, and
pay on recordation of the deed.
Dodging would be impossible. because
the State would be absolutely sore OF
collecting every cen. of tlre&tax: II Is
estimated that the income would be
larger under the lower rate than at
present.
A number OF States In the Union
have already adopted similar laws.
New York, Minnesota and Iowa being
among then. In some ot the States
/ there liz no time limit imposed. taxes
being paid OH recordation for every
4 mortgage or deed Of trust TO matter
what its duration.
The bill does not consider in its pro-
visions municipal bonds taxation. but
{ IN Its report TO the governor the Tax
Commission recommended that a sim
liar tax be imposed upon these along
The lines adopted in twenty-four
States. MANY members of the CONF
mission were of the opinion that there
should be no tax whatever on mu-
nicipal bonds, but as the Constitution
requires that all property except that
specifically exempted be taxed and az
this class nj property was not anoong
that exempted. some tax is necessary
Accordingly the commission contents
itself in recommending that the tax bs
as low as possible and be segregated
to the State.
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