The 1998 General Assembly enacted the Personal Property Tax Relief Act (PPTRA), which provides relief from personal property taxes otherwise payable on the first $20,000 of value for qualifying vehicles.
Code of Virginia Section B58.1-3523 states that vehicles qualifying for property tax relief may include any passenger car, motorcycle, and pickup or panel truck that is determined by the commissioner of revenue of the county or city in which the vehicle has situs to be (i) privately owned or (ii) leased pursuant to a contract requiring the lessee to pay the tangible personal property tax on such vehicle.
Using the definitions as set forth in the Code of Virginia Section B56.2-100, "passenger car" means every motor vehicle designed and used primarily for the transportation of no more than ten persons. "Pickup or panel truck" means every motor vehicle designed for transportation of property having a registered gross weight of under 7,501 pounds. "Motorcycle" means every motor vehicle designed to travel on not more than three wheels.
The 2002 General Assembly also enacted HB 30, which requires the Department of Taxation to develop and implement, not later than January 1, 2003, a comprehensive Personal Property Tax Relief Act Compliance Program. The objectives of the program are:
To enhance taxpayer knowledge and compliance with PPTRA
To establish cost-effective verification and audit procedures
HB 30 authorizes the tax commissioner to promulgate administrative guidelines to implement the PPTRA Compliance Program.
About the Personal Property Tax Relief Act
The Personal Property Tax Relief Act of 1998 provides tax relief for passenger cars, 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 individual to pay the personal property tax and be used less than 50% for business purposes.
Motor homes, campers, trailers, and farm use vehicles do not qualify for tax relief.
If you can answer yes to any of the following questions, your motor vehicle is considered by state law to have a business use and does not qualify for car tax relief.
Is more than 50% of the mileage for the year used as a business expense for Federal Income Tax purposes or reimbursed by an employer?
Is more than 50% of the depreciation associated with the vehicle deducted as a business expense for Federal Income Tax purposes?
Is the cost of the vehicle expensed pursuant to Section 179 of the Internal Revenue Service Code?
Is the vehicle leased by an individual and the leasing company pays the tax without reimbursement from the individual?
The State of Virginia is currently paying a portion of your Personal Property Tax on qualifying vehicles.
Important: If you do not certify that your vehicles are either business use or personal use each year at the times specified and anytime that we request this information, we will have no alternative but to not qualify your vehicle for the tax relief.
If, after reading this, you still are not sure if your vehicle is for business use or personal use, please give our office a phone call and we will determine the use of your vehicle based on the guidelines that we have been given and the actual individual facts per case.
If you have any questions, please contact the Commissioner of the Revenue's Office at 540-942-6610.