Fairfax County Car tax (Arlington: sales, leasing, vehicle registration)

[bangorme]

Is it really 4.57% annually? That's the equivilant of paying sales tax on your car(s) every year! So, if you own a $10,000 car you pay $457 a year. If you have two you pay almost a thousand dollars a year. And, they conveniently have it valued based on a book that you can't check.

And they say Maine taxes are bad lol.

What am I missing (except money).

[VRE332]

Originally Posted by bangorme

Is it really 4.57% annually? That's the equivilant of paying sales tax on your car(s) every year! So, if you own a $10,000 car you pay $457 a year. If you have two you pay almost a thousand dollars a year. And, they conveniently have it valued based on a book that you can't check.

And they say Maine taxes are bad lol.

What am I missing (except money).

What is the Personal Property Tax Relief Act?
The Personal Property Tax Relief Act of 1998 provides tax relief for passenger cars, motorcycles, and pickup or panel trucks having a registered gross weight of less than 7,501 pounds. To qualify, a vehicle must:

• be owned by an individual or leased by an individual under a contract requiring the individual to pay the personal property tax;
  
  AND
  
  
• be used 50% or less for business purposes.

Motor homes, trailers, boats, and farm use vehicles DO NOT qualify for tax relief.
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Does your vehicle qualify for Car Tax Relief?
What is a Qualified Vehicle?

• Any passenger car, motorcycle, pickup or panel truck having a registered gross weight of less than 7,501 pounds.

• The vehicle must be owned or leased by an individual and NOT used for business purposes.

• Leased vehicles for personal (non-business) use qualify when the lessee is responsible for payment of the personal property tax by the terms of the lease agreement.

What is a Non-Qualified Vehicle?

• A vehicle used predominantly for business purposes.

• A vehicle leased by an individual and the leasing company pays the tax without reimbursement from the individual.

• A pickup or panel truck having a registered gross weight of 7,501 pounds or greater.

What is the definition of Business Purposes?
If you can answer yes to any of the following criteria, your vehicle is considered predominantly used for business purposes and does not qualify for Personal Property Tax Relief. Therefore the taxpayer would be responsible for full payment of the tax.

• More than 50% of the mileage for the year is claimed as a business expense for Federal Income Tax purposes OR is reimbursed by an employer.

• More than 50% of the depreciation associated with the vehicle is deducted as a business expense for Federal Income Tax.

• The cost of the vehicle is expensed pursuant to Section 179 of the Internal Revenue Service Code.

• The vehicle is leased by an individual and the leasing company pays the tax without reimbursement from the individual.

If your vehicle is improperly qualified or you are uncertain whether your vehicle is eligible for car tax relief, please contact the Commissioner of Revenue Office at 703-228-3135.
Information about personal property tax relief is also available on the Commonwealth of Virginia website.
Vehicles qualified for tax relief are noted on your tax bill and show a reduction for the portion of the tax the Commonwealth will pay. For qualified vehicles, your tax bill is reduced by the applicable tax relief percentage for the tax year on the first $20,000.00 of assessed value. The Commonwealth will reimburse Arlington County for this reduction amount once you have paid the balance due shown on your bill. If your qualifying vehicle's assessed value is $3,000.00 or less, you have no tax because the Commonwealth's share is 100%. Tax relief is based on Arlington County's effective tax rate on August 1, 1997, which is currently $5.00 per $100.00 of assessed value.
Beginning January 1, 2003, you are required to certify annually to Arlington County that your vehicle remains qualified to receive car tax relief. Therefore, you must review all vehicle information sent to you by Arlington County as well as the Virginia Department of Motor Vehicles (DMV) Application for Certificate of Title and Registration to ensure your vehicles are qualified. Qualifying information may be included on County personal property tax returns, decal applications, and tax bills, as well as the DMV vehicle registration renewals. If your vehicle is improperly qualified or you are uncertain whether your vehicle is eligible for car tax relief because it is used part of the time for business purposes, contact Arlington County at 703-228-3135. When you display your Arlington County decal and pay your taxes on qualifying vehicles, you are certifying to Arlington County that your vehicle has been qualified correctly.
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Personal Property Tax Relief Act (PPTRA)

Car Tax Update for 2007.
No Car Tax in Arlington County for Cars Valued Under $3,000
Under new formula, higher ceiling for totally subsidized cars
Got a 1996 Ford Escort? If you live in Arlington, you will not owe any car tax on that car.

Last year, the Arlington County Board adopted a new structure for its personal property tax, also known as the “car tax.” In prior years, owners of qualified vehicles valued at $1,000 or less paid no car tax. For 2007, qualified vehicles valued at $3,000 or less will pay no car tax, further expanding the County’s goal of making the car tax progressive – charging higher taxes for the most expensive cars and lower taxes for lower-value cars. Specifically:

• Tax on the first $3,000 of assessed value will be fully subsidized by State tax relief money.

• Tax on the next $17,000 ($3,001 to $20,000) of assessed value will be subsidized at 33%: 33% of the tax will be paid out of State tax relief money, 67% of the tax will be paid by the vehicle’s owner.

• Tax on any assessed value over $20,000 will receive no subsidy out of the State tax relief money: the vehicle’s owner will be responsible for the entire tax for that portion.

Personal property tax bills will be mailed to residents in late August, with payment due on or before October 5.
Background on car tax relief
In 1998, the Virginia General Assembly passed the “Personal Property Tax Relief Act of 1998” (PPTRA) that applies to the first $20,000 of the assessed value of eligible cars, panel and pick-up trucks.
Personal property taxes provide a significant source of income to local jurisdictions. This car tax relief was possible because the General Assembly agreed to subsidize local governments and the Commonwealth has routinely subsidized 70% of the tax on the first $20,000 of annual assessed value on eligible vehicles. Vehicles valued at $1,000 or less were fully subsidized.
There were two important changes in 2006 to Arlington County’s vehicle personal property tax. First, the tax rate was raised by the County Board from $4.40 per $100 of assessed value to $5.00 per $100 of assessed value. Second, the Virginia General Assembly changed the way the car tax subsidy was distributed. Starting with tax year 2006 and continuing in 2007, each jurisdiction in Virginia receives a fixed amount for car tax relief, regardless of the number or value of the cars registered in that jurisdiction. It is up to each jurisdiction to decide how to distribute this tax relief to eligible vehicles. Relief will still only be applied to the first $20,000 in annual assessed value.
Arlington’s share of the tax relief money each year will be approximately $31.3 million. This represents 3.29% of the total statewide tax relief.
For more information about the Vehicle Personal Property tax rate change in 2006 click here (30.0K P

[barryhussein]

I thought the first 20,000 was exempt, thanks to Gov. Gilmore. I haven't been there lately so I don't know if it's the same deal. Last year they tried 3000 dollar speeding tickets and it really didn't go over too well.

[VRE332]

Originally Posted by barryhussein

I thought the first 20,000 was exempt, thanks to Gov. Gilmore. I haven't been there lately so I don't know if it's the same deal. Last year they tried 3000 dollar speeding tickets and it really didn't go over too well.

Commonwealth has routinely subsidized 70% of the tax on the first $20,000 of annual assessed value on eligible vehicles. Tax on the next $17,000 ($3,001 to $20,000) of assessed value will be subsidized at 33%: 33% of the tax will be paid out of State tax relief money, 67% of the tax will be paid by the vehicle’s owner.

[VRE332]

Originally Posted by bangorme

That's the equivilant of paying sales tax on your car(s) every year! So, if you own a $10,000 car you pay $457 a year. ).

Nope, you forgot about the 70% relief. So you pay $137.10 per year.

[bangorme]

So, is there a consensus that 70% of car tax on the first $20,000 of value for each car is absorbed by the state? That would mean that the tax paid in Fairfax county would be 30% of 4.57% or 1.371% for the first $20,000 of value, then 4.57% of value over $20,000.

Sorry to be so specific, but I didn't see this anywhere on the Fairfax country website, and I don't understand the thing posted about Arlington county waiving the tax for cars valued under $3000 (as if you could find more then 10 here lol). But that doesn't apply to me, so I'll let the Arlington county residents worry about that.

Thanks again

[joeschmoe]

Bangorme,

The most concise explanation is from the web site itself:

"Car Tax" Relief*- Fairfax County, Virginia

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[saganista]

Originally Posted by barryhussein

I thought the first 20,000 was exempt, thanks to Gov. Gilmore.

All Gilmore did was use the unpopularity of the car tax to campaign on. He didn't have the first clue as to how he would actually implement car tax relief. Keep in mind that this is a county-level tax, and each county has its own different rules for assessing it. What we got in those early years was a situation where you paid the county tax as always, and then months later, you got back a check from the state for 12.5% of the tax you paid. That was millions of checks. The admin costs were nearly as much as the relief. It wasn't until Mark Warner redefined and refunded the program that it started to make any sense at all.

Today, what's left of the car tax is generally trivial unless you own multiple late-model luxury cars. It's well to remember also that all jurisdictions raise the funds that they need in order to provide the services that they do by relying on a variety of taxes, tolls, and fees. It doesn't actually matter what particular taxes, tolls, and fees you pay. What matters is how much you end up paying under all such revenue schemes, no matter what they are called or how they are implemented. On that overall basis, VA imposes a lower tax burden than either MD or DC for nearly all families at nearly all income levels, so if you're going to be living in the DC metro area and want to keep taxes down, you actually WANT to be paying the car tax...