Virginia Moves Toward Removing Tax Breaks for Confederate Heritage Group

Both chambers of the Virginia General Assembly have passed bills that would eliminate unusual tax exemptions for a prominent Confederate heritage group with long ties to the state, presenting a difficult decision for Gov. Glenn Youngkin.

At issue is legislation that would remove tax exemptions for the marble-clad headquarters of the United Daughters of the Confederacy, a group that was founded in 1894 for women who descended from Confederate soldiers and has long been central to Virginia’s culture wars over Confederate heritage and the state’s racial history.

Since at least the 1950s, the group, whose stated purpose is to honor Confederate ancestors through memorial preservation and charity work, has been exempt from paying property taxes and recordation taxes, which are levied when property sales are registered for the public record.

Proponents of the legislation say the tax breaks, approved during segregation, reflect a time when state government and Confederate heritage groups had a close relationship. The group and its allies say the legislation could challenge the organization’s ability to function and could jeopardize its headquarters in Richmond.

On Monday, the State House of Delegates passed a bill that would revoke the exemptions while also eliminating the property tax exemptions for two other Confederate heritage entities, the Stonewall Jackson Memorial Inc. and the Confederate Memorial Literary Society.

About six members of the United Daughters of the Confederacy were present in the gallery and were introduced before the vote by Wren Williams, a Republican House member. A similar bill passed the State Senate last week.

Both bills passed largely along party lines, with Democrats in support. Since neither passed with margins close to the two-thirds vote needed to override a veto, Mr. Youngkin, a Republican, is likely to determine their fates. Both chambers are controlled by Democrats.

In an email, Christian Martinez, a spokesman for Mr. Youngkin, said only that “the governor will review any legislation that comes to his desk.”

Don Scott, a Democrat and the speaker of the House of Delegates, said the legislation reflected change for the better in Virginia.

“If the governor vetoes those bills, I will not be surprised, but it will be very disappointing,” Mr. Scott said in an interview after the House had passed the bill. “But hopefully he won’t.”

In a previous interview, he said it was important to revoke the exemptions from “organizations that continue to promote the myth of the romantic version of the Confederacy.”

The United Daughters of the Confederacy did not return requests for comment. In an online public comment in opposition to the Senate bill, an officer of the organization said the legislation “threatens the continuation” of the group’s activities.

Frank Earnest, a spokesman for the Virginia division of the Sons of Confederate Veterans, a distinct but like-minded group, said the legislation was “a political vendetta, and it should be stopped.” He added, “If people knew what these ladies were and what they really did, rather than what they’re being told, there wouldn’t be an argument” over their tax exemptions.

According to the book “Dixie’s Daughters” by Karen Cox, a history professor at the University of North Carolina at Charlotte, the United Daughters of the Confederacy built statues and sought to vindicate the Confederacy by teaching that it fought for states’ rights, rather than for slavery. In the 1910s, the group endorsed materials that honored the Ku Klux Klan.

The group’s influence has waned in recent decades, and many of the statues it commissioned, including the Confederate Memorial in Arlington Cemetery, have been removed. The headquarters building was set on fire after the murder of George Floyd in 2020, and the group has spent $3 million on repairs and renovations, it says.

In an online statement, the organization denounced any group that “promotes racial divisiveness or white supremacy.”

As a nonprofit group, the organization is exempt from federal income taxes. According to its 2022 tax filing, the organization had $1.4 million in revenue and $1.2 million in expenses.

This year, the headquarters’s total property value was assessed at $4.4 million. A representative with Richmond’s real estate assessor confirmed to Virginia Public Media that if the legislation was signed, the property would become “subject to the city’s regular tax rate,” which is $1.20 for every $100 of assessed value. The tax could total over $53,000 annually for the property.

Efforts to revoke the group’s exemptions started when one Virginia Beach teenager heard about them at a family dinner.

Simone Nied, 17, had developed an interest in the legacy of the Confederacy after the social justice demonstrations in 2020 and through reading the book “Robert E. Lee and Me” by Ty Seidule. At a dinner in 2022, Ms. Nied’s father mentioned finding the United Daughters of the Confederacy’s exemptions in the state tax code through his work as a lawyer, she said in an interview.

Ms. Nied, who would later become an intern for former U.S. Representative Elaine Luria of Virginia, a Democrat, began reaching out to lawmakers and connected with Mr. Scott, then a Democratic member of the House of Delegates. In 2023, Mr. Scott proposed a bill to eliminate the exemptions, but it failed in the House, which was then controlled by Republicans.

But the legislative calculus changed when Democrats took control of the House in last November’s elections, and Mr. Scott became Virginia’s first Black speaker.

The tax code’s section on the recordation tax lists categories of entities that are eligible for exemptions, such as hospitals and corporations. The United Daughters of the Confederacy’s Virginia division is the only organization singled out by name. Alex Askew, a Democratic House member who introduced the current House bill, said in an interview last week that it didn’t make sense that the group would get the recordation exemption.

In 1950, Gov. John S. Battle signed a deed giving the group land in Richmond for a headquarters. The deed stipulated that if the group could not maintain the grounds and the building, it would lose its right to the property, “including all improvements thereon,” and the property would revert to the state. Two years later, the legislature approved the organization’s exemptions from state and local property taxes and the Virginia division’s recordation tax.

In an online public comment in opposition to the Senate bill, Susan McCrobie, the group’s historian general, said the exemptions and the deed had been extended together by the state, so revoking the exemptions could compromise the deed. If the conditions of the deed are violated, the property, including the building, could revert to the state.

She stated that if the bill became law, the organization and the legislature “will be thrust into the courts for adjudication.”

Ms. McCrobie did not respond to an email asking for comment.

Mr. Askew, who introduced the House bill, said it was not an effort to stop the group’s charity work. “It’s not about trying to take them down,” he said. “It’s just more about what we want to express in the commonwealth and how our policies reflect who we are currently.”