Increases in used auto values and you.
Good morning!
It is no surprise to many that things have gotten more expensive over the last couple of years, between price increases for foodstuffs to gasoline prices currently being inflated by geopolitical instability, our dollars aren’t going as far as they once did. One of the areas that has also been impacted by the instability of the last two years has been used vehicles. Why?
Ultimately, it comes down to supply chain issues – automakers have been unable to get consistent supplies of electronics (namely chips) in order to produce new vehicles. This issue is forecast to persist into 2023. Since people are unable to buy new vehicles, they have resorted to purchasing used vehicles. You may remember last year that vehicle values began to creep up, largely among trucks and SUVs. That has spilled over into this year, with significant increases in used car values coming across the board – on average by 40%. This increase has not been borne equally across vehicle types, however. Smaller vehicles are seeing larger increases than larger cars and trucks. As the Commissioner of the Revenue, it is my office’s responsibility to locate and assess taxable property in our locality. In the City of Roanoke, we assess cars and trucks using the clean loan value provided in JD Power’s NADA Guide. This value is generally the lowest or second lowest value published in the guidebook and we use this value to account for wear and tear that a vehicle undergoes – not everyone keeps their car in fresh-off-the-lot condition. As an additional reminder, Commissioners of the Revenue do not set tax rates – that is the purview of a city council or county board of supervisors.
So what does this mean for you?
In Virginia, we assess taxes on personal property, real estate, and other items in order to fund local government expenses. These expenses include teacher salaries and local road repairs. And, unlike other states, Virginia specifically forbids localities from imposing local income taxes. So these taxes upon our assets are the bread and butter of how localities are able to operate in Virginia to provide the services that citizens need. In Roanoke, the personal property tax rate is $3.45 per $100 of an asset’s value – so 3.45%. For comparison, Roanoke County’s personal property tax rate is 3.50% and if you live in the town of Vinton, you pay an additional 1.00% upon that base rate. The City of Salem’s rate is 3.40%. In addition, localities may also impose motor vehicle license fees.
Complicating the issue further is the personal property tax relief that is offered through the state. For vehicles assessed at $1,000 or less, personal property taxes are fully reimbursed to the taxpayer. For vehicles assessed between $1,000 and $20,000, the personal property tax relief rate is established by local ordinance based upon the funds provided to the locality by the state. The full amount of the value of the vehicle is subject to taxation, with relief provided on the amount owed. For vehicles valued over $20,000, relief is only provided on the first $20,000 owed with the amount in excess of $20,000 subject to the full tax rate. Motor vehicle license fees are not covered by personal property tax relief.
If this sounds confusing to you – I assure you, you’re not the only one. Let me illustrate using actual vehicles in the city of Roanoke. All identifying information has been redacted. These five vehicles were taxed in the city of Roanoke in 2021.
| Vehicle | Assessment | Tax Due at 3.45% | 52.1% Tax Relief | License Fee | Total Owed |
| 1994 Ford Ranger | $225.00 | $7.76 | $7.76 | $28.00 | $28.00 |
| 2005 Toyota Camry 4-Cyl. Std | $2225.00 | $76.76 | $39.30 | $28.00 | $65.46 |
| 2014 Kia Optima | $7550.00 | $260.48 | $135.71 | $28.00 | $152.77 |
| 2018 Tesla Model S | $26925.00 | $928.91 | $359.49 | $28.00 | $597.42 |
| 2020 Ford Explorer | $40600.00 | $1400.70 | $359.49 | $28.00 | $1069.21 |
These same five vehicles were also taxed in the city of Roanoke in 2022. As of this writing, Roanoke city council has not adopted a tax relief ratio, so I will use the same ratio for illustrative purposes only.
| Vehicle | Assessment | Tax Due at 3.45% | 52.1% Tax Relief | License Fee | Total Owed |
| 1994 Ford Ranger | $1188.00 | $40.99 | $21.36 | $28.00 | $47.63 |
| 2005 Toyota Camry 4-Cyl. Std | $2900.00 | $100.05 | $52.13 | $28.00 | $75.92 |
| 2014 Kia Optima | $9675.00 | $333.79 | $173.90 | $28.00 | $187.89 |
| 2018 Tesla Model S | $35800.00 | $1235.10 | $359.49 | $28.00 | $903.61 |
| 2020 Ford Explorer | $47450.00 | $1637.03 | $359.49 | $28.00 | $1305.54 |
The Commissioner of the Revenue’s Office is dedicated to working with taxpayers. Bills for your personal property taxes will be going out in mid-April. If you feel that your vehicle’s value is not accurately represented on your bill, you are encouraged to contact the Commissioner of the Revenue’s office to speak with a member of our staff. You may do so by calling (540) 853-2521 or by emailing revenue@roanokeva.gov. We anticipate that call volume will be heavy and appreciate your patience as we endeavor to work with you.
Yours in service,
Ryan LaFountain
Commissioner of the Revenue, City of Roanoke
Posted on 18 Mar 2022, 7:27 - Category: News
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