Mea Culpa, Bills Targeting UDC Should Fail

Is the historical homestead of the Lees of Virginia, Stratford Hall, being stripped of its tax exemptions just because of its connection to one Lee in particular?

By Steve  Haner

Racial animus and revenge are always bad policies. It is now very clear those are the motivations for the bills advancing to strip tax exemptions from legitimate historical and charitable institutions, simply because of connections to the Southern Confederacy. They should die.

The beeping sound you hear is me backing up my truck to prepare for a 180- degree turn. My initial reaction to House Bill 568 was to not really care, but that was based on a cursory reading of the fiscal impact statement. I also forgot the lessons of 40 years of watching the sausage factory and failed to read the bill to the end.

I falsely concluded the bill was limited to removing the exemption enjoyed by the United Daughters of the Confederacy from recordation taxes on any real estate transactions. In that section of code amended by the bill, the UDC is the only group mentioned by name, and there really is not a rational reason it should be the only such group given that special treatment. Such transactions must be rare anyway, so it was clearly about symbolism, not money.

On that basis I pushed back when Jim Bacon rushed in print to the UDC’s defense. I claimed that other charitable exemptions for the UDC still remained. I hereby give him and others an apology. And the true nature of this bill came to the fore when the Virginia Senate amended it to expand the target list.

Along with the recordation tax exemption, which means little, the bill also strips the real property and personal property tax exemptions that were granted to the UDC years ago. Those are significant taxes that are assessed every year, and forcing them to pay will put a major dent in their operating budget, sucking dollars from any actual service programs.

That change comes from amending § 58.1-3607, where the UDC is one of many very diverse non-profits granted the exemptions. It is not being singled out for special treatment. The long list is dominated by historical properties or veteran service groups, some of which might be defunct.

One of the touchstone principles of good tax policy is uniformity. If the General Assembly has exempted a long list of such groups, including Future Farmers and the Disabled American Veterans and the Patrick Henry Memorial Foundation, the UDC is not getting special treatment but instead uniform treatment. It is this Democratic majority that is now applying special treatment, and that special treatment is malice and petty revenge.

As bad as the introduced bill was, the Virginia Senate has now made it worse with a substitute.

It also strikes from the real property exemption list the Robert E. Lee Memorial Foundation (owners of Stratford Hall), the Stonewall Jackson Memorial (which owns the museum in Lexington, I believe) and the Confederate Memorial Literary Society (which seems to own just a collection of materials displayed in museums).

That is targeting. That is obvious and intentional animus just to make a cheap point for tawdry political gain. Those who say, as John Reid did on WRVA this morning, that any and all charitable institutions will now have to prove political correctness to keep their exempt status, well they now have a point. And when the pendulum swings the other way, as it certainly will, the payback and beatings from the other side will commence.

Luckily the House and Senate bills are now out of sync. They can cross over, have their amendments rejected by the other body, and die in a conference committee that never meets. The Democrats will have their rolls calls, which is all they really want, the Instagram equivalent of “doing something to impose justice.”

Seriously, historical buildings owned by non-profits and open to the public for educational purposes should be forced to pay taxes? Taxes not paid by other similar places? If you exempt some, you should exempt all. Weaponizing the tax code is a very bad idea, Virginia.