Tangible Personal Property Taxes
Due date: May 1
The filing and payment of Business Personal Property Tax is a two-step process. (See information below for
Business Personal Property Tax or home page of Finance web site.)
Tax Rate: $3.70 per $100 of assessed value: 1996 - 2009
Description: Localities in Virginia may levy a tax on the tangible personal property of businesses and individuals. All
assessments must be at 100 percent of fair market value and levied and collected uniformly.
Included in tangible personal property are motor vehicles ("car tax"), business furniture and fixtures, computer equipment,
farming equipment, boats, recreational vehicles, campers and trailers. Localities may elect to prorate the taxes on motor vehicles,
and trailers which have acquired situs within a locality after the tax day for the balance of the year. Generally, the situs of a
vehicle is the locality in which the vehicle is normally garaged or parked. However, there are some instances where the general rule
may not apply, such as full-time college or graduate students. Please contact one of our Tax Representatives at (804) 646-5700 to
enable us to answer any questions regarding your particular situation.
The City of Richmond prorates the personal property taxes on vehicles and trailers on a monthly basis for the portion of the year
the vehicle is situated in, or has a situs in the City. For example, if you own a vehicle on the tax date, January 1, but sell it
or move out of the City on March 4, you are taxed on that vehicle for the months of January and February only. However, if you were
to sell the vehicle or move on March 16, you would be taxed for January, February and March. Likewise, if you purchase a vehicle
after January 1, you are taxed only for the time period within the calendar year that you own the vehicle and it is situated in the
City of Richmond.
"Tax Relief" Definition: The Personal Property Tax Relief Act ("PPTRA") provides for the relief from a portion of the tangible personal
property tax imposed on the first $20,000 of value on passenger cars, trucks and motorcycles used for personal use. Vehicles with a
gross weight of more than 7,500 lbs. or for which more than 50% of the use is for business purposes are not eligible for this tax
relief program. You are required to pay the full amount of the vehicle license fee stated on your property tax bill.
QUALIFYING FOR CAR TAX RELIEF
Tangible personal property taxes for personal use vehicles may qualify for tax relief as provided in the Personal Property Tax
Relief Act. The State allocates to the City of Richmond a portion of the $950 million included in the State Budget adopted by
the General Assembly and signed by the Governor. Richmond City Council determines how the City allocates its share of the funds
received from the state to owners of vehicles that qualify for tax relief.
Vehicles valued at $1,000 or less are expected to continue to receive 100% tax relief. Tax relief for vehicles valued between
$1,001 and $20,000 will be based on the City’s share of the $950 million and the total value of vehicles eligible for tax relief.
The tax relief for qualified vehicles valued between $1,001 and $20,000 has not yet been determined for 2009. Once the
tax relief percentage has been established by City Council, qualified vehicles valued at more than $20,000 will receive the
applicable tax relief on the first $20,000 of value only. The vehicle license fee is not included as part of the tax assessment
and is, therefore, not eligible for tax relief.
Important Note:
The State no longer provides the City of Richmond reimbursement for unpaid taxes for tax year 2005 and prior years that were
not paid on or before September 1, 2006. The taxpayer will, therefore, be responsible for 100% of the delinquent taxes.
To qualify for tax relief, the vehicle must be:
- Owned or leased by an individual under a contract that requires the payment of property taxes by the lessee of the vehicle, and
- Used less than 50% for business purposes.
-
Virginia law now requires that vehicle owners certify the use of their vehicle as either personal or business to receive
the benefits of the PPTRA.
-
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?
Certification will be obtained when you register your vehicle and or when you pay your personal property taxes. If you have any questions,
please visit room 103 in City Hall, or call our Customer Care Center at (804)646-5700.
Important note:
Vehicles used primarily for business purposes and vehicles weighing in excess of 7,500 lbs. continue to be assessed by the local tax
officials and are not subject to any of the provisions of the PPTRA.
For more detailed information regarding the Personal Property Tax Relief Act,
click here
to go directly to the Commonwealth of Virginia’s web site.
How does it work?
Generally, vehicles are assessed and billed by the Finance Department based on values published in a market guide, the
National Automobile Dealers' Association's Official Used Car guides (N.A.D.A.). For tax assessment purposes, the City of Richmond
uses the Average Trade-in Value published in the January N.A.D.A. guides.
EXAMPLE:
- Average trade-in value per N.A.D.A. is $5,000
- 5,000 divided by 100 = 50
- 50 multiplied by the tax rate ($3.70) = tax amount
- Tax Amount = $185.00
- PPtrA Credit = $107.30 (58% = 2008 amount)
- Tax Amount less Credit =$77.70 (Due from owner)
Business personal property is self-reported annually by each business. A depreciation schedule is applied to the original
cost of the property to arrive at fair market value. Different depreciation schedules are used for programmable computer equipment
and other business tangible personal property.
2 step process for 2009 tax year:
Step 1 – On the form provided by the Finance Department, submit a listing of property subject to 2009 business tangible personal
property taxes no later than March 1, 2009.
Step 2 – Submit your tax payment on the bill provided by Finance on or before May 1, 2009. Should you fail to receive either
the form necessary for Step 1 or your tax bill for your payment for Step 2, please contact the Tax Assessment Office of the Department
of Finance at 804-646-5700.
Appeals: Taxpayers/property owners can appeal assessments to the Director of Finance and/or to the Richmond Circuit Court.
To view the City and State laws governing personal property taxes, select any of the following links:
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