Machinery and Tools Tax  

The City’s Machinery and Tools Tax is managed by the Department of Finance’s Business Unit. The Machinery and Tools Tax is levied on machinery and tools that are used for manufacturing, mining, processing or reprocessing, radio or television broadcasting, dairy, dry cleaning or laundry businesses.  

Machinery and Tools Tax Forms  

• Return of Business Tangible Personal Property (Machinery and Tools) – Use this form to file your Machinery and Tools tax return for the current tax year 
• Penalty and Interest Waiver Online Application Form – Use this online form to request a waiver of penalty and interest for this tax type

Need a Return of Business Tangible Personal Property (Machinery and Tools) form for a prior tax year? Please contact RVA 311 at (804) 646-7000 or click here to submit a ticket. 

Machinery and Tools Tax Rate, Dates, Penalty, and Interest 

• Rate: $2.30 per every $100 of assessed value of machinery and tools that are used for manufacturing, mining, processing or reprocessing, radio or television broadcasting, dairy, dry cleaning or laundry businesses 
• Dates:  
  • January 1 Value of Machinery and Tools established 
  • March 1 Machinery and Tools Tax return filing due 
  • June 5 Machinery and Tools Tax payment due 
• Penalty: 10 percent or $10.00, whichever is greater, upon the failure to file an application or the failure to pay the tax by the appropriate due date 
• Interest: 10 percent annually when not paid by the due date which begins calculating the first of the following month 

Machinery and Tools Tax Governing Legislation* 

For detailed legislative information on Machinery and Tools Tax, please refer to the following: 

• Code of Richmond: Division 6. - Tangible Personal Property Taxes and Machinery and Tools 
• Code of Virginia: Article 1. Tangible Personal Property Tax 

* Please note, this list may not be exhaustive of all sections of governing code 

Business Tangible Personal Property Tax Frequently Asked Questions (FAQs) 

How is the assessed value of machinery and tools determined? 
Machinery and tools are assessed based on a percentage or percentages of the original total capitalized cost, excluding capitalized interest. Below are the schedules currently used by the City of Richmond to determine the assessed value of machinery and equipment and programmable computer equipment used by a business subject to Machinery and Tools Taxes:  

Assessment Ratios for Machinery and Tools 

 
Assessment Ratios for Programable Computer Equipment 

 
What is considered “idle” machinery and tools? 
Idle machinery and tools are machinery and tools that:  

1. have been discontinued in use continuously for at least one year prior to any tax day, or;  
2. On and after January 1, 2007, have been specifically identified in writing by the taxpayer to the Director of Finance, on or before April 1 of such year, as machinery and tools that the taxpayer intends to withdraw from service not later than the next succeeding tax day, and;  
3. Are not in use on the tax day and no reasonable prospect exists that such machinery and tools will be returned to use during the tax year as per Virginia Code § 58.1-3507 D. 
    

How do I identify machinery and tools as “idle”? 
On or before April 1, specifically identify in writing to the Director of Finance machinery and tools that you intend to withdraw from service the next succeeding tax day and for which there is no reasonable prospect that such machinery and tools will be returned to use during that tax year. 

Can I exclude from my Machinery and Tools Tax return property that is idle during the current tax year? 
Only property that has been:  

1. Discontinued in use continuously for at least one year prior to the tax day of the current tax year, or;  
2. Specifically identified in writing to the Director of Finance on or before April 1 of the prior tax year, or other tax years subsequent to January 1, 2007, as withdrawn from service and not returned to use subsequently can be declared as “idle machinery and tools” on the tax return of the current tax year. 

What happens if equipment that I have withdrawn from service and declared idle is returned to use? 
Virginia Code § 58.1-3507 E. provides as follows regarding situations such as this: 

• The taxpayer shall identify such machinery and tools to the Director in writing on or before the next return due date without extension; 
• Such machinery and tools shall be subject to tax in accordance with the procedures provided in Virginia Code § 58.1-3903 in the same manner as if such machinery and tools had been in use on the tax day of the year in which such return to use occurs; 
• Any interest otherwise payable pursuant to applicable law or ordinance shall apply to such taxes paid after the due date, without regard to the fault of the taxpayer or lack thereof; 
• If the taxpayer has provided timely written notice of return to use in accordance with the provisions of Virginia Code §58.1-3507(E), no penalty shall be levied with respect to any tax liability arising as a result of the return to use of machinery and tools classified as idle and actually idle prior to such return to use. 

Can I appeal a Machinery and Tools Tax assessment? 
An administrative appeal may be filed in writing concerning the Machinery and Tools Tax assessment with the Director of Finance of the City of Richmond at the following address:  

Director of Finance  
Attn: Machinery and Tools Appeal  
900 E. Broad Street, Suite 1003  
Richmond, VA 23219  

Upon receipt of a final local determination issued by the Director, you may file an appeal with the Tax Commissioner of the Virginia Department of Taxation. For more information on this process, please click here.  

A judicial appeal may be filed with the Richmond Circuit Court at the following address:  

Richmond Circuit Court  
Attn: Machinery and Tools Appeal  
400 N. Ninth Street  
Richmond, VA 23219 

If you have a question, comment, or concern regarding the City of Richmond Machinery and Tools Tax, please contact RVA 311 at (804) 646-7000 or click here to submit a ticket.