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Personal property tax increases catch some local residents by surprise
An economist says the Cash For Clunkers took some SUVs off the market, but larger economic forces caused the rise in vehicle values seen in some personal property bills.
FILE/MIKE MORONES/THE FREE LANCE-STAR
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BY JONAS BEALS
Fredericksburg resident Lou Silvey was surprised when she opened her personal property tax bill last week. For the first time she can remember, the value of her vehicle--a 2004 Cadillac SRX, a sport utility vehicle--increased over last year.
Her tax bill went up nearly 55 percent.
Some Virginia residents, especially SUV owners, find themselves in the unusual position of owning a vehicle that appreciated in value. The situation is rooted in the economic climate of two years ago.
High gas prices and the recession lowered the national demand for vehicles in 2008, causing a precipitous drop in car values. SUVs were particularly hard-hit.
A number of localities in Virginia, including Fredericksburg, Stafford and Spotsylvania, "equalized" personal property tax rates for vehicles in 2009. It was an effort to keep revenue from dropping along with vehicle values.
Last year, Fredericksburg City Council raised the personal property rate from $2.99 to $3.40 per $100 of assessed value. In Spotsylvania County, the car tax rate rose from $5 to $6.26 per $100 of assessed value.
The Stafford Board of Supervisors raised the rate from $5.49 per $100 of assessed value to $6.89.
Personal property tax bills are calculated differently in each locality, but in Stafford they are based on 40 percent of the National Automobile Dealers Association retail value of the vehicle.
The tax rate increase was designed to offset what county officials said was a 22 percent drop in the overall value of the county's vehicles. Prior to last year, the rate in Stafford had not changed since 1990.
From 2008 to 2009, the total assessed value of all vehicles in Stafford dropped 12 percent.
It rebounded a little more than 1 percent this year, but that bounce, coupled with the increased rate, has left some residents in the unusual position of having to pay considerably more for a car with higher mileage and another year on the tires.
"Typically, most vehicles depreciate one year to the next," Stafford County Commissioner of the Revenue Scott Mayausky said.
The economic anomaly may provide an unexpected revenue boost to localities.
suv sticker shock
SUVs and large trucks are most likely to have increased in value this year.