Here’s a sleeper: The General Assembly passed a law in the last session that would enable localities to tax energy-efficient buildings and homes at a lower rate than other real estate. Now a group in Charlottesville is urging the city to pass an ordinance instituting the dual tax rate.
Writes Seth Rosen with the Daily Progress:
To qualify for the lower tax rate bracket, buildings would have to be 30 percent more energy-efficient than the standards prescribed in the state’s building code. Any home or business that is Energy Star or Earthcraft certified – two of the most common energy-saving classifications – likely would meet the criterion, officials said.
I’m conflicted. I totally believe that Virginians need to more toward more energy-efficient buildings and patterns of development. Tax incentives, which work through market mechanisms, are preferable to government mandates.
But I’m worried about the legal precedent of establishing two classes of property for taxation purposes. Could this open the door for all manner of preferential tax treatment? The state income tax code is already swiss cheese, riddled with exemptions that, according to a Warner administration-era study, shifted some $1 billion a year in tax burden from privileged categories of taxpayers to the rest of us. Do we really want to see the same process replicated with the personal property tax?