What is Personal Property Tax Relief?
A. Personal Property Tax Relief is a program that resulted from the Personal Property Tax Relief Act of 1998. The intention of the act was to phase out the car tax completely. In order to do this, the act required the Commonwealth of Virginia to pay localities a percentage of each citizen’s tax bill. The percentage of relief each year may change from the projected amount depending on economic conditions. The percentage that the Commonwealth pays was intended to increase each year until it reached 100%. The act does not change the localities’ tax rates. PPTRA program costs soared beyond original estimates as new car values increased substantially faster than inflation, “holding” periods for vehicles shortened as a result of unprecedented dealer incentives, vehicle ownership per household grew and more people moved into the state. It soon became clear that PPTRA when fully implemented would cost at least double what had been projected. As a result, the General Assembly put a $950 million
The Commonwealth of Virginia provides funding for tax relief for passenger car, motorcycles, and pickup or panel trucks having a registered gross weight of less than 7,501 pounds. To qualify, a vehicle must be owned by an individual or leased by an individual under a contract requiring the individuals to pay the personal property tax; AND be used less than 50% for business purposes. Motor homes, trailers and farm use vehicles do not qualify for tax relief.
