Vehicle Assessed Values for Ad Valorem Tax Purposes (Montgomery, Madison: sale, car registration)

[bmrisko]

How exactly does Alabama calculate vehicle values to be used in assessing the ad valorem tax? My wife and I got our renewal notices today and I am shocked at the amounts...or maybe I am just used to paying around $20 in TN and the roads there were actually good, but that is beside the point.

Shouldn't they factor vehicle mileage into the equation? The reason I ask is my wife has a 2002 Chevy Tahoe w/ 100k miles and they have the assessed value as 1380 on her renewal notice. I have a nearly identical 2004 Chevy Tahoe with 180k miles and they have my assessed value as almost double hers at 2580. I know mine would not bring almost double hers at private sale and frankly, I feel pretty ripped off by the state. I just plugged my vehicle into KBB and got a value of $10,495.

Does anyone have any insight as to whose butts they pull these values from and how to appeal? $225 for a yearly vehicle tag renewal just seems absolutely absurd to me. Welcome to AL, I guess...

[cyberfox]

Originally Posted by bmrisko

How exactly does Alabama calculate vehicle values to be used in assessing the ad valorem tax? My wife and I got our renewal notices today and I am shocked at the amounts...or maybe I am just used to paying around $20 in TN and the roads there were actually good, but that is beside the point.

Shouldn't they factor vehicle mileage into the equation? The reason I ask is my wife has a 2002 Chevy Tahoe w/ 100k miles and they have the assessed value as 1380 on her renewal notice. I have a nearly identical 2004 Chevy Tahoe with 180k miles and they have my assessed value as almost double hers at 2580. I know mine would not bring almost double hers at private sale and frankly, I feel pretty ripped off by the state. I just plugged my vehicle into KBB and got a value of $10,495.

Does anyone have any insight as to whose butts they pull these values from and how to appeal? $225 for a yearly vehicle tag renewal just seems absolutely absurd to me. Welcome to AL, I guess...

I'm certainly not an expert on this but I'm sure they use averages from some source such as Kelly Blue Book or the like. They have no way of knowing your mileage or how many dents you have.

[bmrisko]

Originally Posted by cyberfox

I'm certainly not an expert on this but I'm sure they use averages from some source such as Kelly Blue Book or the like. They have no way of knowing your mileage or how many dents you have.

Yea, obviously they have no way of knowing the mileage, especially without yearly inspections. I may call the courthouse tomorrow to see if there is a way to get a re-assessment due to high mileage. Even a 2004 Tahoe with 20,000 miles doesn't value at $17,000+ on KBB, so they are using some weird matrix, likely that leans in their favor. However, my wife's vehicle's value seems pretty spot on, which has me questioning their method.

[cyberfox]

Let us know what you find out.

[writerwife]

I think they pull a number out of their hoohaa. Honestly.
Many years back I had a really old, beat up, chevette. I recall after many years of ownership the ad valorem tax was suddenly more than double what it had been previous years and I called about it. they had assessed the overall value of the car way beyond its worth. I was actually told by the woman that I spoke to that they assessed the value where they wanted because they needed more $$. I was given no info as to how they determined a number but I was actually told that. I was flabbergasted. I said.. "what?! You just decided the car was suddenly worth 3 times what it actually is for tax purposes?" and she said, "yep".

They're here to help, ya know.

[Traeger]

What if your car is worth MORE than the assessed amount? Would you be complaining then?

If the value was based on actual mileage how exactly would 'we' pay for the inspection -or other way to confirm the mileage/value?

Alternatively, you can live in TN and drive in every day. Property taxes are more there but maybe it would work for you.

Point is taxes must be paid for the good of a civil community and they must be paid somehow. If you want to "win" you change your lifestyle to those things that are taxed low and enjoy those things that are not. For example I have a beautiful house that is taxed low but an affordable vehicle. You can pay for the roads that I enjoy with mileage in the teens through higher road tax while I get 35mpg. But fact is the roads here are quite good, the taxes measured in the whole are inexpensive.

If you doubt me look at other states in the union.

[willel2338]

Originally Posted by bmrisko

How exactly does Alabama calculate vehicle values to be used in assessing the ad valorem tax? My wife and I got our renewal notices today and I am shocked at the amounts...or maybe I am just used to paying around $20 in TN and the roads there were actually good, but that is beside the point.

Shouldn't they factor vehicle mileage into the equation? The reason I ask is my wife has a 2002 Chevy Tahoe w/ 100k miles and they have the assessed value as 1380 on her renewal notice. I have a nearly identical 2004 Chevy Tahoe with 180k miles and they have my assessed value as almost double hers at 2580. I know mine would not bring almost double hers at private sale and frankly, I feel pretty ripped off by the state. I just plugged my vehicle into KBB and got a value of $10,495.

Does anyone have any insight as to whose butts they pull these values from and how to appeal? $225 for a yearly vehicle tag renewal just seems absolutely absurd to me. Welcome to AL, I guess...

Originally Posted by bmrisko

How exactly does Alabama calculate vehicle values to be used in assessing the ad valorem tax? My wife and I got our renewal notices today and I am shocked at the amounts...or maybe I am just used to paying around $20 in TN and the roads there were actually good, but that is beside the point.

Shouldn't they factor vehicle mileage into the equation? The reason I ask is my wife has a 2002 Chevy Tahoe w/ 100k miles and they have the assessed value as 1380 on her renewal notice. I have a nearly identical 2004 Chevy Tahoe with 180k miles and they have my assessed value as almost double hers at 2580. I know mine would not bring almost double hers at private sale and frankly, I feel pretty ripped off by the state. I just plugged my vehicle into KBB and got a value of $10,495.

Does anyone have any insight as to whose butts they pull these values from and how to appeal? $225 for a yearly vehicle tag renewal just seems absolutely absurd to me. Welcome to AL, I guess...

First, there is no way to appeal.

Second, you have to realize that Ad Valorem tax is a property tax. Alabama has very low property tax rates on land and structures. Further, the state grants a homestead exemption that reduces property tax by 50% if it's a single family home and your primary domicile. Further still, if you're age 65 or older, you don't pay any state Ad Valorem taxes [county, local and school district taxes may still be owed]

Keeping in mind the thousands you are likely saving in property taxes helps to put the car registration in perspective.

In my opinion it does anyway... Sure, $225 for a car tag seems expensive, but you're probably saving more than that each month alone in a lesser escrow payment to your mortgage servicer...

That's the argument for the Ad Valorem tax on vehicles.


The argument against it is that this tax is very regressive since if you don't own a home you don't benefit from the low property taxes and you still get boned with the property tax on your vehicle. Alabama also taxes food which is quite regressive since poor people and rich people often consume relatively the same dollar amounts of food. Alabama does a lot of other silly things to target poor people. Medicaid and food stamps are among the lowest in the nation and a lot of federal subsidies aren't provided to the poor because the state doesn't want to administer any programs even if they're funded with federal $. I digress.

Originally Posted by writerwife

I think they pull a number out of their hoohaa. Honestly.
Many years back I had a really old, beat up, chevette. I recall after many years of ownership the ad valorem tax was suddenly more than double what it had been previous years and I called about it. they had assessed the overall value of the car way beyond its worth. I was actually told by the woman that I spoke to that they assessed the value where they wanted because they needed more $$. I was given no info as to how they determined a number but I was actually told that. I was flabbergasted. I said.. "what?! You just decided the car was suddenly worth 3 times what it actually is for tax purposes?" and she said, "yep".

They're here to help, ya know.

I don't doubt that you were told this, but that doesn't make it true. Just because the person who collected your fee at the counter doesn't know the answer doesn't mean that Alabama comes up with these assessed values arbitrarily. Of course they don't.


The assessed value is determined in the "Alabama Personal Property Appraisal Manual" which is published annually by the State of Alabama Dept of Revenue in Montgomery. It's very official. Lilliputian even. They didn't pull the number out of their ass. Everybody with a 2004 Tahoe with the same chassis type has the same assessed value.

It's fairly close to KBB/NADA values actually. It assumes average conditions and indexes the depreciated value based on average mileage. If I recall correctly, it uses double declining balance depreciation over an assumed 15 year life and assessed values really start to drop quickly after 5-7 years. [A 16 year old car has an assessed value of $0.]

Class IV motor vehicles have an assessed value of 15% of the appraised value.

And, then that assessed value is multiplied by the millage rates for county, state, local, etc.


So, in this case.. the $2580 assessed value is the appraised value of $17,200 X 15%. That $2580 is then multiplied by whatever the millage rates are for his county and municipality. That is the Ad Valorem tax. Then, the actual registration of $24.75 is tacked on along with some other fees and the total in this case is approximately $225.


You think your car is worth $10,495. The state says it's worth $17,200. Considering the excessive miles that affected the price, and the fact the $10,495 is probably biased downward anyway, I think the state did ok here.

In any event, good luck appealing since there isn't even a mechanism in place to do so. The assessed value is done at the state level and your local county is collecting the fee on behalf of the state and then remitting payment to Montgomery. Even if there were a mechanism and an appeals process, you would need to speak with someone in the capital. Good luck without an appointment, and when they hear why you're calling they're going to throw the book at you. They're not going to say, "Oh, yes please Mr. bmrisko, where can I mail you the check for the $86 that we overcharged you?!" The juice isn't worth the squeeze for that small amount of money. Pay your registration and move on.

[dijkstra]

In Tennessee, you have to pay a "wheel" tax when you purchase a vehicle. In Alabama, we don't have that but instead they get it over the years in ad valorem taxes. Take your pick......pay thousands up front or spread it out over the years. Either way they are going to get it.

[Tourian]

Red Book.

[jasonhsv]

It is possible to appeal a car tax assessment - I successfully did this last month. The Madison County Tax Assessor's office website describes how to do this.

I have a 2012 Acura TSX 4-cylinder. There is a V6 version, which costs about $5k more when new. I renewed my tag last month, and noticed it had my car listed as "Acura TSX V6". I sent an appeal to the tax assessor office, asking if this was just a typo, or if they were assessing me for a more expensive car.

Less than a week later, I receive a response from the Madison County License Dept. There was a check for ~$40. The letter I received with it was confusing, but it sounded like the State vehicle system doesn't have this exact car type as an option. They adjusted the car to the closest type that was available.