The percentage of car tax relief Smyth County residents will receive for 2019 dropped earlier this month.
The tax relief was set at 51 percent by the board of supervisors.
When the “No Car Tax” legislation, or more formally the Personal Property Tax Relief Act of 1998, was adopted, the commonwealth intended to subsidize 100 percent of the taxes on personal-use vehicle valued at below $20,000 for localities. However, when state revenue slowed down, the commonwealth capped the amount of money that each jurisdiction receives. As the number of vehicles and their value increase, each year the localities have to examine the assessments and determine what percentage the state subsidy will cover. Taxpayers pay the remainder.
Initially, the county’s car tax relief was 70 percent. By 2012, for most vehicle owners, the state funds took care of 61 percent of the bill with taxpayers covering the remaining 39 percent. Then in 2013, when the county experienced growth in both the number of vehicles citizens owned and the value of those vehicles, the tax relief rate was dropped to 55 percent.
In 2015, it was decreased to 54 percent, while in 2016 the percentage was lowered to 53. The next year, it was dropped to 52 percent.
According to Commissioner of the Revenue Jeff Richardson, the county receives just over $1.8 million as its subsidy from the commonwealth. The amount of relief the county can provide is based on the number of qualifying vehicles and their values. However, with people moving in and out of the county and selling vehicles, those figures are constantly changing, said Richardson.
Smyth County pays 100 percent of the personal property tax on vehicles valued at $1,000 or less.
Owners only receive relief on the first $20,000 of a vehicle’s value.
The total eligible tax on Smyth County taxpayer-owned vehicles for 2019 is about $2.7 million.
The commissioner explained to the supervisors that the county can’t make money on the program. If the county pockets some money from the program in one year, it must roll that money into the next year’s computations.
Richardson has noted that the rate of relief varies from county to county. In other regions, the commissioner said, it’s far less than it is in Smyth. In eastern Virginia, he noted, many counties’ rate is around 25 percent with some as low as 5 to 10 percent.
With the rate set, the personal property tax tickets can be prepared.