IW anticipates $6.3M in machinery and tools taxes

Published 11:02 am Wednesday, July 19, 2017

Isle of Wight County’s financial staff is anticipating roughly $6.3 million in revenues from its temporarily increased machinery and tools tax rate for fiscal year 2017-2018. The county’s Board of Supervisors voted unanimously during its meeting on Monday evening to appropriate these anticipated revenues into the county’s general fund, following a public hearing at which no one spoke.

The motion also moved roughly $2 million from the county’s general fund balance to its capital improvement fund, and farmer’s market revenues and expenditures in the amount of $46,000.

The exact amount transferred to the county’s capital improvement fund was $2,057,300, which the board had set aside at the end of fiscal year 2016-2017 for future capital improvement needs. The exact amount appropriated into the general fund from anticipated machinery and tools tax revenues was $6,360,445.

This marks the latest development in the county’s ongoing efforts to resolve issues resulting from the methods that were used to calculate the county’s M&T tax rates in previous fiscal years.

According to Assistant County Administrator Don Robertson, the county changed its method for calculating its M&T taxes effective January 2016, and as a result, several businesses received M&T refunds last fiscal year. The most notable of these was International Paper, which received approximately $1 million following their successful lawsuit against the county in February 2017.

The temporarily increased M&T tax rate specifies $4.24 per every $100 of assessed value, a 142-percent increase from the county’s normal rate of $1.75 per $100. This was implemented during a previous board meeting to allow the county to recoup the cost of having to pay back refunds for prior years. Robertson said that of the roughly $6.3 million M&T revenues anticipated for this fiscal year, $1,164,274 will be used to provide economic development incentive grants to businesses that would end up paying more in M&T taxes this year under the temporary rate than the amount they received in refunds last year.

“The adjustments were intended to be revenue neutral and have little to no impact on the businesses,” Robertson said, adding that the county’s goal was to have the taxes paid by businesses this year equal the amount that was refunded to them last year.

When asked if this action by the county would be in keeping with the ruling of the court in the IP lawsuit, Robertson replied that IP and other businesses that received refunds last year could still keep their refunds.

“We simply suggested to them that they could minimize their impact by using those same funds to offset the increased taxes based on the rate adjustment,” he said.

The farmer’s market revenues and expenditures were added to the county’s anticipated income following the Town of Smithfield’s decision not to take over running the farmer’s market this year.

In other business, the board voted 4-1 to approve a lease agreement for the Carrsville emergency communication tower site and voted unanimously to allow a real estate tax exemption for the surviving spouses of county police officers, firefighters and other first responders killed in the line of duty.

The dissenting vote on the communications tower came from Newport District Supervisor William McCarty, who took issue with a provision in the agreement allowing the land owner granting the lease to receive 40 percent of the revenue from each sublet that would go on the tower.

This means that if the county were to lease space on the tower to a cellular company and a broadband company, the landowner would receive 40 percent of the revenues from each lease. McCarty thought 40 percent was too high of a rate, though County Administrator Randy Keaton said that based on the county staff’s research, that was market value for similar tower lease agreements.

Regarding the tax exemption for surviving spouses of first responders, Windsor District Supervisor Joel Acree suggested that the county include job descriptions for police officers, firefighters and EMTs, and add a grandfather clause so that spouses of first responders who did not have current certifications but had served the county for decades could still qualify.

A significant portion of the meeting was also devoted to a public hearing on the request of John Glover of Tidewater Custom Mobile Homes to amend the county’s current comprehensive plan to allow him to construct a model modular home on the site of a vacant, dilapidated brick ranch house located on Brewer’s Neck Boulevard in Carrollton. After numerous citizen comments, the board voted 3-2 to approve the request. Dissenting votes came from Hardy District Supervisor Rudolph Jefferson and Carrsville District Supervisor Rex Alphin.

Additional public hearings included the application of Richard W. and Tandy Coyle, who sought rezoning to create two residential lots near Walters Highway, the application of William Birdsong for rezoning to create a single family residential lot on Mill Swamp Road and revisions to the county’s dangerous dog ordinance. All three motions following the hearings passed unanimously.

The revised dangerous dog ordinance incorporates the provisions of Virginia House Bill 2381, which was signed into law by Gov. Terry McAuliffe on March 13. HB 2381 allows a law enforcement officer or animal control officer the discretion to decide when to file dangerous dog charges and to provide the officer some leeway into the process when the injury inflicted on a person is of a minor nature.