Personal Property Tax Questions
What has caused a general increase in vehicle values for Tax Year 2021?
Some of the key factors include:
- the closing of some auto manufacturing plants to produce necessary Personal Protective Equipment for the COVID-19 pandemic.
- a shortage of used vehicles caused by leasing agencies and other large fleet companies that choose not to replace the inventory.
- a strong demand, fueled by the Federal Reserve cutting the interest rates to near 0% in March of 2020.
What is generally considered personal property for taxation purposes?
Automobiles, trucks, recreational vehicles, motorcycles, trailers, boats, airplanes, mobile homes, business furniture, fixtures, equipment.
How is the amount of tax to be levied on personal property determined?
The Isle of Wight County Board of Supervisors establishes a personal property tax rate each year in June. The actual tax is then computed by multiplying the property’s assessed value by this rate. The current rate for general personal property is $4.50 per $100.00 of assessed value of property.
How is personal property assessed?
The Commissioner of the Revenue is generally required to determine the assessed value of motor vehicles based on a recognized pricing guide, if available, or a percentage of the original cost. The pricing publications used are the National Automobile Dealers Association official used car guide and the official older car guide. The value taken from these books is the average loan value. If the vehicle is not listed in the guide, the value will be based on a percentage of purchase price or a percentage of the prior year’s assessment.
For personal property other than motor vehicles, the assessed value is normally based on a percentage of the original cost.
What is Personal Property Tax Relief?
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 10,001 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;
- be used 50% or less for business purposes.
Motor homes, trailers, and Farm Use vehicles do not qualify for tax relief. State law does NOT provide for Personal Property Tax Relief for vehicles used for business.
Does my car qualify for Car Tax Relief?
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 expense 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?
What personal property is prorated?
The proration of personal property taxes applies to motor vehicles (autos, trucks, motorcycles), recreational vehicles, trailers (including mobile homes) and other vehicular equipment requiring registration through the Virginia Department of Motor Vehicles and boats requiring registration through Game and Inland Fisheries (GIF).
If boat owners state they have sold their boat or moved the boat to another locality, the owner must notify GIF in writing of any change in status of the vessel. They will accept address changes, cancellations, and changes to the city/county where the boat is normally garage, docked, or parked by emailing to email@example.com. or fill out the GIF form and mail to 4010 W. Broad St., P.O. Box 11528, Richmond, VA 23230. After notifying GIF, please contact the Commissioner of Revenue’s Office at (757) 365-6222. Boats registered with the USCG will require a bill of sale submitted to Commissioner of Revenue’s Office.
Airplanes, machinery and tools, and business personal property are not prorated.
What does proration of personal property taxes mean?
The term proration refers to the authority of a locality to collect personal property taxes on a pro rata basis– that is, generally for the portion of the year that an item is located there. Proration means that the assessed tax on a motor vehicle or trailer will be prorated on a monthly basis based upon the number of months that it maintains situs in Isle of Wight, or is owned by the taxpayer.
If I move out of Isle of Wight during the tax year or sell my motor vehicle during the tax year, am I eligible for a refund of the personal property tax paid?
Yes, in most situations. Generally, if you move out of Virginia altogether or into another Virginia locality that prorates personal property taxes, or sell or dispose of a motor vehicle, your personal property tax for that vehicle will be prorated. You will receive a credit or a refund of taxes paid for that portion of the remaining year, provided that all other taxes and debts due the county have been paid. Approximately 50 localities in Virginia prorate personal property taxes on motor vehicles.
A temporary absence from the County of Isle of Wight does not make you eligible for a prorated refund. To receive a refund you must submit proof, such as relocation papers, leases, utility bills, or tax records from another locality, that the vehicle is no longer located in Isle of Wight.
If my vehicle is damaged during the tax year, will the tax be prorated?
No. The property’s assessed value as of January 1st will be used as the basis for the personal property tax. If you feel your vehicle is below average condition because of mechanical malfunctions, excessive mileage or other reasons, you may appeal your assessment for an individual review of your vehicle’s value.
When must I file a tax return on the personal property that I own?
The filing deadline for reporting mobile homes, airplanes, boats, business personal property, and machinery and tools is May 1st.
When is my personal property tax payment due?
Taxes on all personal property in the County of Isle of Wight are due on December 5th and June 5th of that year. Taxes on motor vehicles and trailers that are moved into the county after this date will receive a supplemental bill that will be due thirty (30) days from the date the bill was issued.
When selling or disposing of a motor vehicle or trailer, do I need to notify anyone?
Yes. Both the Virginia Department of Motor Vehicles and the Commissioner of the Revenue’s office must be notified immediately. This is the citizen’s responsibility and not that of the motor vehicle dealer or new owner.
What are my tax obligations if I am an active duty military person maintaining Isle of Wight as my legal residence?
Under the Soldier’s And Sailor’s Civil Relief Act, your tax liability would be to the County of Isle of Wight regardless of where you may be stationed or where your vehicle may be garaged or located during the year.
As an active duty member of the military, would I be taxed for personal property in Isle of Wight if I maintained a legal domicile in a state other than Virginia?
If you are active duty military, live in Isle of Wight, and your legal residence is not Virginia, you are required to provide the Commissioner of the Revenue a copy of a current leave and earnings statement (LES) to receive the exemption for both the local vehicle registration fee and personal property taxes on your vehicle(s). This is allowed by United States Code, Title 50, Servicemembers’ Civil Relief Act of 1940.
If you are the spouse of an active duty member and would like to apply for the exemption, you must complete an exemption affidavit and submit it with your spouse’s LES to qualify. On November 11, 2009, the Military Spouse’s Residency Relief Act (MSRRA) amended the Servicemembers’ Civil Relief Act of 1940, by extending the exemption to active duty military members’ spouses if (i) the service member is present in Virginia in compliance with military orders; (ii) the spouse is in Virginia solely to be with the service member; and (iii) effective January 1, 2018, for tax purposes the spouse claims the same state of residency as the active duty member. Effective January 1, 2009, vehicles may be co-owned with the active duty military member or solely owned by the member’s spouse.
Owners of previously exempted vehicles are required to re-qualify exemptions each year. A current LES may be presented to the Commissioner of Revenue’s Office by:
- Emailing a copy to firstname.lastname@example.org
- Faxing a copy to (757) 356-9731
- Mailing a copy to Commissioner of Revenue, P. O. Box 107, Isle of Wight, VA 23397
- Presenting in person: 17090 Monument Circle, Suite 113, Isle of Wight, VA 23397
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