Newsroom
For Immediate Release
Monday, August 07, 2006
Contact: Mariel Tewksbury 703-228-3022 (voice) 703-228-4611(TTY)
No Car Tax in Arlington County for Cars Valued Under $3,000
Under new formula, higher ceiling for totally subsidized cars
Got a 1996 Ford Escort? If you live in Arlington, you will not owe any car tax on that car.
Earlier this year, the Arlington County Board adopted a new structure for its personal property tax, also known as the “car tax.” In prior years, owners of qualified vehicles valued at $1,000 or less paid no car tax. For 2006, qualified vehicles valued at $3,000 or less will pay no car tax, further expanding the County’s goal of making the car tax progressive – charging higher taxes for the most expensive cars and lower taxes for lower-value cars. Specifically:
- Tax on the first $3,000 of assessed value will be fully subsidized by State tax relief money.
- Tax on the next $17,000 ($3,001 to $20,000) of assessed value will be subsidized at 40%: 40% of the tax will be paid out of State tax relief money, 60% of the tax will be paid by the vehicle’s owner.
- Tax on any assessed value over $20,000 will receive no subsidy out of the State tax relief money: the vehicle’s owner will be responsible for the entire tax for that portion.
Personal property tax bills will be mailed to residents in late August, with payment due on or before October 5th. Following is a chart showing examples of the amount of tax that will be owed on vehicles having various assessed values:
Assessed Vehicle Value | Tax Owed 2006 | Tax Paid 2005 | State Subsidy |
$2,500 | $0.00 | $33.00 | Yes. Full in 2006, partial in 2005 |
$5,000 | $60.00 | $66.00 | Yes, partial |
$15,000 | $360.00 | $198.00 | Yes, partial |
$20,000 | $510.00 | $264.00 | Yes, partial |
Background on car tax relief
In 1998, the Virginia General Assembly passed the “Personal Property Tax Relief Act of 1998” (PPTRA) that applies to the first $20,000.00 of the assessed value of eligible cars, panel and pick-up trucks. For more information, visit the County's Web site.
Personal property taxes provide a significant source of income to local jurisdictions. This car tax relief was possible because the General Assembly agreed to subsidize local governments and the Commonwealth has routinely subsidized 70% of the tax on the first $20,000 of annual assessed value on eligible vehicles. Vehicles valued at $1,000 or less were fully subsidized.
There are two important changes in 2006 to Arlington County’s vehicle personal property tax. First, the tax rate has been raised by the County Board from $4.40 per $100 of assessed value to $5.00 per $100 of assessed value. Second, the Virginia General Assembly changed the way the car tax subsidy is distributed. Starting with tax year 2006, each jurisdiction in Virginia will receive a fixed amount for car tax relief, regardless of the number or value of the cars registered in that jurisdiction. It is up to each jurisdiction to decide how to distribute this tax relief to eligible vehicles. Relief will still only be applied to the first $20,000 in annual assessed value.
Arlington’s share of the tax relief money each year will be approximately $31.3 million. This represents 3.29% of the total statewide tax relief.
Arlington, Va., is a world-class residential, business and tourist location that was originally part of the "10 miles square" parcel of land surveyed in 1791 to be the Nation's Capital. It is the geographically smallest self-governing county in the United States, occupying slightly less than 26 square miles. Arlington maintains a rich variety of stable neighborhoods, quality schools and enlightened land use, and received the Environmental Protection Agency's highest award for "Smart Growth" in 2002. Home to some of the most influential organizations in the world - including the Pentagon - Arlington stands out as one of America's preeminent places to live, visit and do business.
