Virginia’s Personal Property Tax on Cars

In Virginia, owners of cars and trucks are subject to an annual personal property tax. This is a local tax assessed and collected by the city or county where the vehicle is typically parked or garaged, with the revenue funding services like schools and police departments. This tax is based on your vehicle’s value and is a separate financial obligation from the sales tax paid at purchase or the annual state registration fee. Because each locality administers its own program, tax rates and processes vary across the state.

Calculating Your Car Tax Bill

The foundation of your car tax bill is the vehicle’s assessed value, which localities determine annually as of January 1st. Cities and counties use a recognized pricing guide, with the J.D. Power Official Used Car Guide being the most common standard. They use the “clean loan” value listed in the January edition of the guide for that tax year.

This assessed value is then multiplied by a tax rate set by your local governing body. These rates are expressed as a dollar amount per $100 of assessed value. For example, a rate of $4.15 per $100 of value is equivalent to a 4.15% tax rate.

The formula to determine the gross tax is the vehicle’s assessed value divided by 100, then multiplied by the local tax rate. If a car is assessed at $15,000 in a locality with a tax rate of $4.00 per $100, the calculation would be ($15,000 / 100) x $4.00, resulting in a gross tax of $600. This figure represents the total tax liability before any relief is applied.

The Personal Property Tax Relief Act

The Personal Property Tax Relief Act (PPTRA) is a state law that reduces the tax burden for many Virginians. The act provides a state-funded subsidy to localities to lower the tax bills on qualifying personal-use vehicles. This relief is applied directly to the tax bill as a credit.

For a vehicle to be eligible for PPTRA relief, it must be a passenger car, motorcycle, or a qualifying pickup or panel truck. A truck qualifies if its registered gross weight is 7,500 pounds or less, though trucks up to 10,000 pounds can be eligible if used for personal, non-business purposes. The vehicle must be owned or leased by an individual and used predominantly for non-business purposes. A vehicle is considered used for business if more than 50% of its mileage is claimed as a business expense for federal income tax purposes or if it is expensed under Section 179 of the IRS code.

The relief is calculated as a percentage of the tax due on the first $20,000 of the vehicle’s assessed value, with any value over $20,000 taxed at the full local rate. This percentage can change annually and varies by locality based on state funding and the total value of qualifying vehicles in that jurisdiction. If a qualifying vehicle’s value is $1,000 or less, the tax is often eliminated entirely.

Reporting and Payment Procedures

Vehicle owners must report their vehicles to the local tax authority, which is the office of the Commissioner of the Revenue or a similar finance department. When you purchase a vehicle or move one into a Virginia locality, you are required to report it within a set timeframe, often 60 days, to avoid a late filing penalty. While some information may come from the Virginia DMV, the reporting responsibility rests with the taxpayer.

When reporting a vehicle, you must provide the locality with specific details. This information includes:

• The Vehicle Identification Number (VIN)
• The make, model, and year of the vehicle
• The date of purchase
• The full name and address of all owners

Once registered with the locality, a tax bill is mailed to the owner. Payment due dates vary, with some localities requiring a single annual payment and others billing in two installments, often in the spring and fall. Taxpayers can pay their bills online, by mail, or in person at a local government office.

Adjustments for Vehicle and Residency Changes

Moving into Virginia

When you move to Virginia from another state, you must register your vehicle with both the Virginia DMV and your new local Commissioner of the Revenue. The personal property tax will be prorated, so you will only owe tax for the portion of the year the vehicle is in that locality. Complete this registration promptly to ensure accurate billing and avoid penalties.

Moving Out of Virginia

If you move out of Virginia, you must notify the tax office in the jurisdiction you are leaving. This action stops future tax assessments and can initiate a prorated refund for the current tax year. The locality will require proof of your new residency, such as a copy of the vehicle’s registration card from your new state. Proactive notification is required to adjust your tax account.

Moving Between Virginia Localities

When moving between Virginia localities, you must inform both the old and new jurisdictions. You will need to register the vehicle with the new locality’s tax office and de-register it from the old one. The tax is prorated, so you will receive a bill from your new jurisdiction and may receive a refund or credit from your old one.

Buying or Selling a Vehicle

After purchasing a vehicle, you must report it to your local tax authority within the specified timeframe. This ensures the vehicle is added to your tax account for the correct period. When you sell, trade, or otherwise dispose of a vehicle, notify your locality promptly. This removes the vehicle from your tax roll and may result in a prorated refund for taxes already paid. A copy of the bill of sale is often required.