Get documents about "Personal Property Tax Relief Act
Document Sample
Overview of Current
Program
2
What is the Personal Property
Tax Relief Act (PPTRA)?
The 1998 General Assembly enacted
the Personal Property Tax Relief Act,
which provides relief from personal
property taxes otherwise payable on
the first $20,000 of value for
qualifying vehicles.
3
What is a Qualified Vehicle?
• Any passenger car, motorcycle,
pickup or panel truck having a
registered gross weight of less
than 7,501 pounds. (Note: Motor
homes, trailers and farm-use
vehicles do not qualify for the
program.)
4
• The vehicle must be owned or leased
by an individual and NOT used for
business purposes.
• Leased vehicles for personal (non-
business) use qualify when the lessee
is responsible for payment of the
personal property tax by the terms of
the lease agreement.
5
What is the amount of Tax Relief
currently provided by the State?
All qualified vehicles are eligible for tax
relief. Owners of vehicles assessed at
$1,000 or less receive 100% tax relief.
Owners of vehicles assessed for more than
$1,000 receive tax relief on the first
$20,000 of assessed value based on the
following percentages:
6
Tax Relief Percentages
1998 12.5%
1999 27.5%
2000 47.5%
2001 70.0%
2002 70.0%
2003 70.0%
2004 70.0%
2005 70.0%
7
2004 General Assembly
Legislation
Impacting PPTRA
8
House Bill 5018ER
The Commonwealth’s reimbursements
to local governments for PPTRA on
qualifying vehicles will be set at $950
million per year for tax years 2006 and
beyond.
9
Senate Bill 5005ER
• Each county’s, city’s, or town’s share
of the $950 million shall be prorated
based upon the actual payments to
such locality for tax year 2005 and
shall be paid by the Commonwealth
over a 12-month period beginning
July 2006.
10
• For tax years 2006 and beyond, each
locality receiving reimbursement from
the Commonwealth shall provide
personal property tax relief on
qualifying vehicles as follows:
11
(A) The local governing body shall
establish its general personal property
tax rate (currently $3.50/$100),
which shall be applied to that portion
of the value for each qualifying
vehicle in excess of $20,000;
12
(B) The local governing body shall also
establish one or more reduced tax
rates which shall be applied to that
portion of the value for each
qualifying vehicle which is below
$20,000; and
13
(C) The revenue generated from these two
sources (i.e., the taxes on qualifying
vehicles both above and below
$20,000), when combined with the
Commonwealth’s fixed reimbursement,
should then approximately equal the
amount of revenue the locality would
have received had the general tax rate
been applied to 100% of the value on
all qualifying vehicles.
14
Relevant Statistics
15
Total Vehicle Personal Property Revenue
Millions v. PPTRA Relief
$75
65.7
60.1 62.4 60.4 63.0
59.7
$60 55.4
$45
33.9 33.6 32.6 34.0 34.0
$30 25.1
15.6
$15
$0
2000 2001 2002 2003 2004 2005 2006
Calendar Year (E) (E) (E)
Veh. Pers. Prop. Revenue PPTRA Relief
16
Total # of Vehicles
Thousands
v. # of Vehicles on PPTRA
400
339 344 349
321 326 334
319
290 295 301
300 268 271 275 284
200
100
2000 2001 2002 2003 2004 2005 2006
Calendar Year (E) (E) (E)
Total # of Vehicles Total # on PPTRA
17
Potential Impact of Legislation
on Taxpayers
18
Conversion of the Current Formula
for PPTRA Reimbursement into an
Effective Tax Rate
Assm’t ≤ $20K x $3.50/$100 General Tax Rate = Tax
70% PPTRA ($490 max.)
*30% Taxpayer Portion
*Note: This 30% residual balance x $3.50/$100
general tax rate = $1.05 effective tax rate
(on portion of assessment ≤ $20K).
19
Calculations for Mock Bill
$35,000*.0350 = $1,225 Total Levy
Breakdown
$20,000*.0105 = $210
$15,000*.0350 = $525
Subtotal $735 Total Taxpayer Portion
$20,000*.0245 = $490 PPTRA Reimbursement
Grand Total $1,225
20
A qualified vehicle assessed at $35K
2005 2006(E) 2007 (E) 2008 (E)
PPTRA
$490 $470 $450 $432
Awarded
Taxpayer
Portion $735 $755 $775 $793
of Bill
Grand
$1,225 $1,225 $1,225 $1,225
Total
Tax Rate < $20K $1.05 $1.15 $1.25 $1.34
+ + + +
Tax Rate ≥ $20K $3.50 $3.50 $3.50 $3.50
21
A qualified vehicle assessed at $15K
2005 2006(E) 2007 (E) 2008 (E)
PPTRA
$367.50 $352.50 $337.50 $324.00
Awarded
Taxpayer
Portion $157.50 $172.50 $187.50 $201.00
of Bill
Grand
$525.00 $525.00 $525.00 $525.00
Total
Tax Rate < $20K $1.05 $1.15 $1.25 $1.34
22
A qualified vehicle assessed at $1K
2005 2006(E) 2007 (E) 2008 (E)
PPTRA
$35.00 $23.50 $22.50 $21.60
Awarded
Taxpayer
Portion $0.00 $11.50 $12.50 $13.40
of Bill
Grand
$35.00 $35.00 $35.00 $35.00
Total
Tax Rate < $20K $1.05 $1.15 $1.25 $1.34
23
Issues of Concern
24
• Explaining this new legislation to our
citizens (including why the amount of
tax relief now varies among the
surrounding jurisdictions). Factors to
consider include:
* Population
** Rate of growth
*** Value of vehicles
25
• Determining the personal property tax
rate(s) on an annual basis for the initial
$20,000 of value relevant to qualified
vehicles so that the County receives its
appropriate amount of revenue.
26
• Changing our computer system to
accommodate multiple tax rates during
the first year of implementing these
revisions to the PPTRA program.
27
• Producing new tax bills which address
all of the issues enumerated above (as
well as the billing of vehicles assessed
at less than $1,000 which will no longer
be fully reimbursed).
28
SAMPLE
29
Calculations for Mock Bill
$35,000*.0350 = $1,225 Total Levy
Breakdown
$20,000*.0115 = $230
$15,000*.0350 = $525
Subtotal $755 Total Taxpayer Portion
$20,000*.0235 = $470 PPTRA Reimbursement
Grand Total $1,225
30
Related docs
