Personal Property Tax - Car Tax Relief
What is it?
The Personal Property Tax Relief Act of 2004 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 fall into one of the following three categories:
- vehicle is owned by an individual;
- vehicle is leased by an individual under a contract requiring the individual to pay the personal property tax; or
- vehicle is held in a private trust for nonbusiness purposes by an individual beneficiary
AND the vehicle must be used 50% or less for business purposes.
Note: Motor homes, trailers, boats, all-terrain vehicles, off-road motorcycles, and farm use vehicles DO NOT qualify for tax relief.
Do I Qualify?
If you can answer YES to any of the following questions, your motor vehicle is considered by State Law to have a business use and DOES NOT qualify for Car Tax Relief.
- Is more than 50% of the mileage for the year used as a business expense for federal income tax purposes OR reimbursed by an employer?
- Is more than 50% of the depreciation associated with the vehicle deducted as a business expense for federal income tax purposes?
- Is the cost of the vehicle expensed pursuant to Section 179 of the Internal Revenue Service Code?
- Is the vehicle leased by an individual and the leasing company pays the tax without reimbursement from the individual?
How does it work?
- 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 (as determined annually by the Board of Supervisors) on the first $20,000.00 of assessed value. The Commonwealth will reimburse Chesterfield County for this reduction amount. If your qualifying vehicle's assessed value is $1,000.00 or less, you have no tax liability because the liability will be satisfied with funds from the Commonwealth. Tax relief is based on Chesterfield County’s effective tax rate on January 1st.
- You are required to certify annually to Chesterfield County that your vehicle remains qualified to receive car tax relief. Therefore, you must review all vehicle information sent to you by Chesterfield 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 and tax bills, as well as the DMV vehicle registration renewal notices.
- 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 us at (804) 748-1281.
- When you pay your taxes on qualifying vehicles, you are certifying to Chesterfield County that your vehicle has been qualified correctly.
Car Tax Update 2004
- The Commonwealth's car tax relief program enacted in 2004 to be effective beginning with the 2006 tax year, applies to the first $20,000.00 of the assessed value of cars, panel and pick-up trucks with a registered gross weight of under 7,501 pounds and motorcycles that are owned or leased, if they are used by individuals for non-business purposes.
- The Commonwealth’s share of the car tax remains at 61% for 2007, as determined by the Chesterfield County Board of Supervisors.
- For those vehicles qualified for tax relief, Chesterfield's annual vehicle tax bills will show both the 61% tax credit paid by the Commonwealth and the remaining tax amount owed by the owner. The owner must pay the remaining tax amount and a local vehicle registration fee of $20.00 by the June 5th due date.
For additional information concerning vehicle tax assessments, please contact us.
Year |
Percentage of the Car Tax Bill Relieved |
1998 |
12.5% |
1999 |
27.5% |
2000 |
47.5% |
2001 |
70% |
2002 |
70% |
2003 |
70% |
2004 |
70% |
2005 |
70% |
2006 |
61% |
2007 |
61% |
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