April 2008

Guidelines for Refund of Grantor’s Tax Fees

A process has been established for the return of fees and taxes collected by the Northern Virginia Transportation Authority. The following is a brief summary of the process. Please click here to view the complete guidelines. The Clerk of the Court is required to make refunds to the settlement agents who paid fees on behalf of sellers involved in real estate transactions. If no settlement agent was involved in a transaction, the Clerk will establish a refund procedure. Settlement agents are required to make refunds to the appropriate parties within 90 days after receipt of funds from the Clerk, but in no event later than August 22, 2008. Settlement agents will disburse funds to the appropriate parties pursuant to the sales contract, HUD-1 settlement statement, property settlement agreement or other legally binding agreement of the parties to the transaction. If the Clerk or settlement agent is unable to locate or identify the appropriate parties to whom funds are due before September 30, 2008, the refunds may be treated as unclaimed property. NVAR suggests, as a courtesy, that agents forward a copy of the HUD-1 statement from affected transactions to sellers. The Clerk’s office recommends waiting two weeks before contacting settlement agents to check on the status of any expected refunds. If you have additional questions regarding these procedures, please contact NVAR General Counsel, Ann-Lewise Shaw at 703.207.3262 or by email.

 

3/10/08

Grantor’s Tax: NO Three-Year Timeframe for Refunds

Several media outlets have erroneously reported that it may take up to three years for the taxes collected by the Northern Virginia Transportation Authority (NVTA), including the grantor’s tax, to be refunded. We have been assured by NVTA that this is not true.

NVTA expects that it may take a matter of months to locate most taxpayers, though it may take longer to find those that have moved out of the area. For those that cannot be located immediately, state law requires NVTA to hold unclaimed refunds in a trust for three years. If the taxpayer still cannot be located, the money would then be sent to the Virginia Literacy Fund.

NVAR is still awaiting official instructions on how taxpayers can claim their refunds.  We will continue to keep you informed on the latest developments.

 

Regional Grantor's Tax Collection to Cease

3/4/08 The Northern Virginia Transportation Authority (NVTA) ordered local and state governments to cease collection of all regional fees late Monday night. These fees include the regional portion of the grantor’s tax of $.40 per $100 ($4 per $1,000). Fairfax County officials have notified us that they are in the process of reprogramming their computers and online cover sheets to reflect the changes. They expect this change will be completed by noon today. However, NVTA will need assistance to determine how to distribute refunds to those who have already paid the increased grantor’s taxes. Local clerk’s offices do not have records of grantors’ forwarding addresses. In addition, they cannot determine if the refund should be split among multiple parties (such as in cases of divorce) or if buyers agreed in the purchase contract to pay the grantor’s taxes. NVTA will meet Thursday night to establish an official refund policy. In the meanwhile, potential applicants for a refund should retain evidence of payment. NVAR will keep you informed of further developments as we receive them.   Earlier Story: 3/3/08 Given the Virginia Supreme Court’s finding that the Northern Virginia Transportation Authority (NVTA) cannot impose taxes, we will all be receiving questions about the additional grantor's taxes that have been paid to the Authority. NVAR has communicated with local clerks of the court regarding anticipated refunds on grantor's taxes paid since January 1, 2008. The Virginia Court Clerk’s Association has asked the Virginia Attorney General for an opinion as to when it should stop charging the tax, as the Supreme Court order does not become effective for 10 days. The Attorney General will respond by Monday or Tuesday. The Northern Virginia Transportation Authority has 10 days to ask the Supreme Court to reconsider its ruling, and NVTA staff plans to make that request. However, given the unanimous vote, NVAR does not think the request is likely to be successful. Local tax departments will be working with NVTA on a refund plan. The NVTA is collecting and holding those funds. Individuals who have paid this tax will eventually be asked to write to the NVTA for the refund and present a recording receipt. If the person does not have the receipt, the county clerk’s office will be able to obtain a copy. In the meantime, the legislature and the Governor are looking at the next steps regarding transportation funding. NVAR will update you as soon as we have further information.