Personal property tax rate to increase

Mecklenburg County residents will see an increase in their personal property taxes in the coming weeks as invoice preparations begin.

Commissioner of Revenue Ed Taylor explained the values of various vehicles in a survey of Southside Virginia tax rates.

“As most of you know, new and used cars are extremely hard to find. Dealers are literally pulling their hair trying to find cars for their customers. Prices on vehicles have gone up significantly.” Taylor made sure to point out that he was not blaming any of the local dealers for the vehicle price increase.

According to Taylor, assessment values were up 10% to 40% on average. The make and model of the car or truck has caused the increases to vary some but assessment values have gone up significantly this year. Taylor, along with every other Commissioner of Revenue in the state, uses NADA/J.D. Power used car guide clean loan value to assessment vehicles. Taylor says that the clean loan value is typically 20% less than what you would pay at a dealership.

Taylor said that the most important attribute to the shortage of vehicles is the “chip shortage”. These chips control everything in a vehicle from braking to engine operation. “Ford and GM made the announcement last week that they would shutter, temporarily, some of their plants that make cars and trucks because they can’t get chips,” said Taylor.

Taylor says that until chip plants are built in the United States and the country becomes self sufficient, there will continue to be an issue with receiving these chips from countries like Taiwan and China, who are having trouble supplying the materials to other countries due to the pandemic.

Board Member Hargrove asked if the tax increase would start with any particular year model. Taylor said that it varied from vehicle to vehicle. He says that pickups and SUV’s hold their value “amazingly”. County Administrator Wayne Carter added that the biggest value increases would be on 2015 vehicles and up.

“We are hearing people say that they bought a car two or three years ago and the dealer is willing to give them what they paid for it and in some cases more. That’s because vehicles are in such short supply,” said Taylor.

Charles Jones asked if someone had two of the same vehicle with one driven significantly more than the other, how they would be taxed exactly the same. Taylor explained that the clean loan value is used without adjustments. “It goes back to the mileage issue. The clean loan value is about a 20% discount for both vehicles. Until the vehicle reaches a 200 mile threshold, there’s very little difference in the value.”

Chairman Glenn Barbour said that the Board and the Commissioner of Revenue needed to get the word out to the public to prepare them for what is “coming down the pike” and why it is increasing.

Carter said that they planned for personal property taxes to increase in the budget because they could “see the trend coming from February, March, and April and it was slowly increasing”.

Carter also pointed out that debt set off is one of the things that the county uses to collect personal property taxes. “Right now people are getting their child tax credit every month, which means that next year you are not going to get that value back. So that $300 per child that you are getting all year, you’re not going to get back per child next year, which is going to greatly affect rebates. People who got rebates are going to owe taxes that have been on the news. If the do not get a rebate, that’s going to affect our collection rate.”

The county will be preparing and sending out personal property collection invoices over the next month.