AGENDA DATE: 7/1/2015
TITLE:
Title
Ordinance to Establish Personal Property Tax Relief for Certain Leased Vehicles
BODY
SUBJECT/PROPOSAL/REQUEST: Proposed ordinance to grant mandated Personal Property Tax Relief to vehicles leased by members of the U.S. military or their spouses
ITEM TYPE: Regular Action Item
STAFF CONTACT(S): Foley, Letteri, Burrell, Davis, Herrick
PRESENTER (S): Betty Burrell
LEGAL REVIEW: Yes
REVIEWED BY: Thomas C. Foley
BACKGROUND: The 2015 General Assembly adopted House Bill 1589 to amend Virginia Code § 58.1-3524 to require each locality receiving personal property tax reimbursement (PPTR) from the Commonwealth to ensure that the reimbursement covers all of the tax attributable to the first $20,000 of value on each qualifying vehicle leased by an active duty member of the United States military, his spouse, or both, pursuant to a contract requiring the active duty member to pay the tangible personal property tax on such vehicle, if the vehicle would not be taxed in Virginia if it were owned. This new state law requires a corresponding amendment to the County Code regarding the County’s administration of personal property tax relief locally.
STRATEGIC PLAN: Goal 4: Economic Prosperity: Foster an environment that stimulates diversified job creation, capital investments, and tax revenues that support community goals
DISCUSSION: Personal property tax relief applies only to vehicles personally owned for personal use. However, with many vehicle leases, even though a vehicle is primarily used by individual(s), the vehicle remains titled with a corporate lessor that is often ineligible for personal property tax relief. The terms of many leases shift responsibility for the property taxes to the individual user(s), even though the individual does not own title to the vehicle.
The new law was intended to provide tax relief to active duty members of the U.S. military and their spouses who lease vehicles, and whose leases require them to pay the personal property tax on their vehicles. The new law requires localities to extend this relief to these affected military members and their spouses.
Staff has prepared a draft ordinance (Attachment A) to amend County Code § 15-1103, Personal Property Tax Relief, to comply with House Bill 1589.
BUDGET IMPACT: The proposed ordinance would have no fiscal impact on the County. However, because the new state law mandates the County to allocate PPTR to certain leased vehicles previously unqualified for relief, it could impact the amount of relief available for allocation to other qualifying vehicles.
RECOMMENDATION:
Recommendation
Staff recommends that following the public hearing, the Board adopt the attached ordinance (Attachment A).
ATTACHMENTS:
Attachment A - Proposed Ordinance
Attachment B - House Bill 1589