May 7, 2024 - News

Why Richmonders are probably seeing higher car tax bills this year

Illustration of top down car on dollar skid marks

Illustration: Eniola Odetunde/Axios

Some Richmonders are experiencing sticker shock when opening their annual car tax bills, which started hitting local mail and inboxes last week.

Why it matters: The tax break locals have been getting on their personal property bills since 2022 dropped significantly this year.

The big picture: Each year, every Virginia locality get state funds to offer residents personal property tax relief on the first $20,000 of their car's assessed value.

Due to COVID-era surges in car values, Richmond City Council approved in 2022 a stair-step approach to how much car tax relief it would offer over the next three years.

  • In 2022, the city covered 50.4% of the total tax due on the first $20,000 of the car's assessed value.
  • In 2023, it was 36.6%.
  • This year, it's 22%.

Zoom in: So this year, on a car valued at $20,000, the total car tax due for locals is $577 ($740 before relief with the city covering $163).

  • Last year, the owner of a car with that same value would've owed $469, and $367 the year before that.

Be smart: The city uses the J.D. Power Pricing Guide's clean trade-in value, also called the NADA Guide, to determine a car's value. The city's vehicle tax rate is $3.70 per $100 of the assessed value.

  • Payments are due by June 5 of each year.
  • Residents can separately apply for some personal property tax relief based on a car's mileage or condition.

Worth noting: Richmond's suburban neighbors charge a lower car tax rate than the city and will offer a higher relief percentage this year, RVA5X5 reports.

Meanwhile, back in the city, some locals also got hit with delinquent notices and late fees for their 2023 car tax bills in their new bill, according to a YouTube video posted last month by city finance director Shelia White posted.

  • According to the video, the city may be open to waiving some of those late fees if the bill or payment were delayed due to Richmond's USPS delivery issues.
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