                                 CODE OF VIRGINIA

EXEMPTIONS NOT APPLICABLE WHEN BUILDING IS SOURCE OF REVENUE (§ 58.1-3603)

A. Whenever any building or land, or part thereof, exempt from taxation pursuant
to this chapter and not belonging to the Commonwealth is a source of revenue or
profit, whether by lease or otherwise, all of such buildings and land shall be
liable to taxation as other land and buildings in the same county, city or town.
When a part but not all of any such building or land, however, is a source of
revenue or profit, and the remainder of such building or land is used by any
organization exempted from taxation pursuant to this chapter for its purposes,
only such portion as is a source of profit or revenue shall be liable for
taxation.

B. In assessing any building and the land it occupies pursuant to subsection A,
the assessing officer shall only assess for taxation that portion of the
property as is a source of profit or revenue and the tax shall be computed on
the basis of the ratio of the space as is a source of profit or revenue to the
entire property. When any such property is leased for portions of a year the tax
shall be computed on the basis of the average use of such property for the
preceding year.

C. In determining whether any building or land, or part thereof, is a source of
revenue or profit, rent from the lease of the property applied to reduce
indebtedness against the property by payment of the principal of an outstanding
bond or note held by a political subdivision of the Commonwealth shall not
constitute revenue or profit, provided that the property is leased to a lessee
who is exempt from taxation pursuant to &#xA7; 501(c)(3) of the Internal Revenue
Code and is used by such lessee exclusively for charitable purposes.

HISTORY: Code 1950, §§ 58-14, 58-16; 1950, p. 659; 1984, c. 675; 1996, c. 534.