Please help me understand the VA car tax (Arlington, Fairfax: deductible, income)

[fiasco]

So I read inklings a while back here about the Virginia car tax. So I tried to go on the VA state gov websites to understand more and just got more confused. Can someone here put it in plain English? If I have a car that is worth $14,000, what am I going to have to pay when I move to NoVa? Are there no tax breaks based on income? I just want to know what I should budget for, and what the time frame is for paying it.

[ChristineVA]

It's called personal property tax and its on cars, boat, etc. Each county has a different tax rate so you wouldn't be able to get a good estimate until you knew where you were going to live.

I have four cars (two new and two older) and my total bill was around $900 for all of them.

I used to live in Maryland and we did not have personal property tax; however, we had an extra payroll tax and that's how they got their money. The payroll tax was quite a bit more than I've ever had to pay in personal property tax. So depending where you live now, your tax bill may end up being a wash--you might just pay taxes in different ways.

[fiasco]

Originally Posted by ChristineVA

It's called personal property tax and its on cars, boat, etc. Each county has a different tax rate so you wouldn't be able to get a good estimate until you knew where you were going to live.

I have four cars (two new and two older) and my total bill was around $900 for all of them.

I used to live in Maryland and we did not have personal property tax; however, we had an extra payroll tax and that's how they got their money. The payroll tax was quite a bit more than I've ever had to pay in personal property tax. So depending where you live now, your tax bill may end up being a wash--you might just pay taxes in different ways.

I'll be living in Fairfax. And is it an every year tax or just a one-time tax?

[car54]

You did't find anything about it on the VA state gov websites because it is NOT A STATE TAX. It is a local tax...city, county, or town, depending on where you live.

[airjay75]

I don't think there is any sort of relief for the car tax based upon income, but my understanding is that you can challenge the value the jurisdiction places on your vehicle if you think it's too high. I don't know how involved that process is, but it is a potential option to lower the amount of tax. I believe you can challenge it based upon the physical condition and/or the mileage. I have two compact cars (2005 Elantra and 2009 Corolla) and my personal property tax this year on those cars was around $130. I'm in Fairfax County.

Because the tax is based upon the estimated value of your cars, I believe it is also deductible for federal tax purposes, which may lessen the impact of the tax depending upon your particular tax situation.

[ChristineVA]

Originally Posted by airjay75

I don't think there is any sort of relief for the car tax based upon income, but my understanding is that you can challenge the value the jurisdiction places on your vehicle if you think it's too high. I don't know how involved that process is, but it is a potential option to lower the amount of tax. I believe you can challenge it based upon the physical condition and/or the mileage. I have two compact cars (2005 Elantra and 2009 Corolla) and my personal property tax this year on those cars was around $130. I'm in Fairfax County.

Because the tax is based upon the estimated value of your cars, I believe it is also deductible for federal tax purposes, which may lessen the impact of the tax depending upon your particular tax situation.

I got mine lowered due to high mileage. Very easy to do.

[ChristineVA]

Originally Posted by fiasco

I'll be living in Fairfax. And is it an every year tax or just a one-time tax?

You pay every year.

[snowdenscold]

Due to state funding of car tax "relief", you effectively have different "tax brackets" based on the value of your car. Each jurisdiction does it a little differently, and the exact numbers change year to year, but basically you should see a pretty reduced rate up to $20,000 in value, and then a much higher rate beyond that. There may even be a 0% rate for the first couple thousand in value.

In other words, a $45,000 value car will have a tax that is way more than triple what a $15,000 value car would have.

For your 14K car, it might run you a couple hundred bucks.

[boyd888]

Every county has slightly different rate and rules, but the resulting tax is very similar.

For example, Fairfax County charges 4.57%, but currently (in 2012) has a 63% subsidy for the first $20,000 of assessed value. So the tax rate on the first $20K is effectively 1.7%. Any amount over $20K is taxed at the 4.57%.

So for your $14K car the tax should be 14000*0.017 = $238.

If you bought a new BMW or something for $50K, the tax is (20K*.017) + (30K*.0457) = $1711 (!!!)

The car tax is also deductible on your taxes if you itemize. So the tax is not directly tied to income, but at the same time it is because the tax on expensive cars is very high and rich people tend to have nicer cars, although they are also more likely to itemize deductions as well.

[Cardiff Kook]

depends on the county. I believe you pay twice a year in Arlington. Probably run you a couple hundred in total