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As vehicle values rise, so do personal property tax bills

SoVaNow.com / September 22, 2021
Many local residents will pay higher taxes on their vehicles this year despite no increase in Mecklenburg County’s personal property tax rate.

Mecklenburg County Commissioner of Revenue Ed Tayor said the rising levies stem from higher tax assessments on vehicles now on the road. A shortage of new and used vehicles for sale has resulted in inflated prices and higher tax valuations, which in turn drives up personal property tax bills.

The county’s personal property tax rate remains unchanged at $3.36 per $100 in value.

Speaking at the Sept. 13 meeting of the Mecklenburg County Board of Supervisors in Boydton, Taylor said, “I recently sent you a memo, [a] chart showing values of various vehicles, and a survey of Southside Virginia tax rates. In the information that I sent you, I stated that assessment values were up anywhere from 10 percent to 40 percent on average. The make or model of the car or truck has caused these increases to vary some, but as a rule of thumb, assessment values have gone up significantly this year.”

Taylor said he wanted to make clear that he was not accusing local auto dealers of artificially raising prices or gouging customers. The confluence of several factors drove up prices on new vehicles along with the assessed value of existing vehicles.

When the COVID pandemic first hit the United States and there was a shortage of PPE, Taylor said the federal government pressed car manufacturers to convert their assembly plants from making auto parts to respirators and ventilators. “A number of manufacturers stepped up and invested millions of dollars to convert their factories,” he explained. In doing so, they reduced their capacity to manufacture cars and trucks.

Some manufacturers have yet to ramp up to their pre-pandemic capacity. Reuters News Service estimates that auto production fell 19 percent in the United States in 2020.

Taylor said with fewer new vehicles available for purchase, rental car companies did not sell off and replenish their inventories as they historically do. “Thus, the number of used vehicles that would have entered the used car market did not [materialize].” This led to a reduction in the number of used vehicles available for repurchase.

The National Automobile Dealers Association estimates that there are typically around 3 million used cars in inventory, ready for resale. Today there are only around 1 million.

The third factor, which Taylor said was “the last and most important shoe to drop over the last six months,” has been the shortage of computer chips that are needed by vehicle manufacturers. “Most chips are made in Taiwan and China,” Taylor explained. “These countries are saying that they are struggling with COVID themselves and they can’t turn out the chips fast enough for their own use much less for the rest of the world.

Taylor acknowledged that a computer chip manufacturing facility is expensive to build, costing in the billions of dollars. But he sees it as a necessary expense. Unless or until the United States ramps up the number of domestic chip manufacturing plants and becomes self-sufficient, the auto industry and other manufacturers that need chips will “continue to be at their [Taiwan and China’s] mercy.”

He called it “a real Catch-22 situation.

“The bottom line is that our taxes are going to go up because of this once-in-a-lifetime event and it could last up to a couple of years,” Taylor said. “Everybody is affected. No one likes it.”

Of the two vehicles he owns, one increased in value by 59 percent and the other by 39 percent, Taylor said.

When asked if the make, model, or mileage of a vehicle affects the assessed value, Taylor said, “It varies from vehicle to vehicle. Those vehicles with good gas mileage have appreciated significantly but the number of miles on a car is not as important. Pickups have always held their value but have also appreciated significantly.”

The vehicles most impacted are those manufactured in 2015 and beyond, but all cars and trucks, except those that are in “wrecked” condition, will see an increase in assessed value. “If you bought a 2017 car or later model, then its current value is likely equal to your purchase price,” Taylor said.

“The silver lining,” Taylor said, is that personal property taxes in Mecklenburg County are anywhere from 12 to 33 percent less than the rates paid by residents in the surrounding counties.

County Administrator Wayne Carter said any additional revenue the county receives from personal property taxes will go into the newly created rainy-day fund.

When asked what standard he uses to assess the value of vehicles, Taylor replied, “I use the NADA (National Automobile Dealers Association) car guide to provide values. It is the oldest and most respected service in the United States.” The tax assessor’s office applies what is known as the “clean loan value,” for which the value is 20 percent less than a person would pay for a vehicle purchased from a retail dealer.

He ended by saying, “Unfortunately, this is not good news. The facts are facts. I just wish I had better news.”

In other business,

» Supervisors approved a request for a special exception permit by David Jones to allow him to create three recreational vehicle sites on property he owns near U.S. 1 and Highway 58 near South Hill. Carter said the property has water, electrical hookups and septic available for the RVs. He said the existing drain field will only accommodate three units.

» Superintendent of Schools Paul Nichols updated board members on the ongoing construction at the consolidated secondary school complex in Baskerville. Nichols said installation has been completed for the trusses at the middle school, and roofing work continues at other portions of the building. Also completed is the concession stand at the middle school athletic fields. Progress is being made on adding the brick façade to the building exterior and installing windows.

The school complex is still on target for full and final completion as of Aug. 1, 2022. To date $110.1 million of the nearly $150 million project budget has been spent.

» J.R. Caskey Excavating Company in Goochland was awarded the contract for the U.S. 58 Turning Lane Reconstruction Project at Herbert Drive. The base cost of he project is $1,349,757.

Work is set to begin in April on the Highway 92 bridge at Butchers Creek. For the next 15 months, while work continues there, traffic will be reduced to a single lane.

» Carter said the lack of available personnel to work at the Meherrin River Regional Jail Authority satellite facility in Boydton is the reason the local jail remain shuttered for now.

» Demolition work has been finished at the former Buckhorn Elementary School.

» Mecklenburg County has launched its new website, http://www.mecklenburgva.com. The new page provides direct access to links for online meetings, the county’s GIS website, forms and more.

» With another solar utility company seeking to build a facility in Mecklenburg County, supervisor and Planning Commission member David Brankley asked the board to consider clarifying the county’s position on solar facilities. Brankley added his own view: “I wish we could just stop these things in their tracks.”

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Comments

The BOS should lower the personal property tax rate so that it should not affect any bills. I am sure that there is a way, but they will tell you there is not. The state and local governments are flush with money and yet they steal more and people do nothing. NO One should pay their property taxes. If antifa thugs can destroy a business with no arrests then honest people should be able to start a tax boycott!

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Allpolitical2, really, no one should. Pay property taxes. So, no government functions, no road repairs, do you want roads like east is on mountain men? And who are you going to call when there is a Fire or someone is hurt and you need the Rescue Squad? The right amount of tax makes the wheel roll round and round. Talk with your vote unless you want to run for office. But your ideas need to get you elected. Virginia is a BLUE state thanks to the Richmond, Norfolk, Virginia Beach, all of Northern Virginia areas. The state of West Virginia and South Carolina are red states and can take at least one more citizen or family. Please move. Thank you!

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Bud, you must be one of those "tolerant of all" folks.


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