Passed by the Virginia General Assembly in 1998, the Personal Property Tax Relief Act (PPTRA), Code of Virginia Section 58.1-3523 et. seq. provides relief on personal property taxes.
All three of the following requirements must be met to qualify for tax relief:
- Passenger car, Pickup or Panel Truck, or motorcycle.
- Owned by a natural person or leased by a natural person under a contract requiring such person to pay the personal property tax.
- Used for nonbusiness purposes.
Definitions of Motor Vehicles Qualifying for Tax Relief:
- "Passenger car" means every motor vehicle other than a motorcycle designed and used primarily for the transportation of no more than ten persons including the driver.
- "Pickup or panel truck" means every motor vehicle designed for the transportation of property and having a registered gross weight under 7,501 pounds.
- "Motorcycle" means every motor vehicle designed to travel on not more than three wheels in contact with the ground, except any vehicle included with the term "farm tractor" or "moped" as defined in Code of Virginia Section 46.2-100.
A vehicle is considered to be used for business purposes if:
- More than 50% of the mileage for the year is used as a business expense for Federal Income Tax purposes OR reimbursed by an employer
- More than 50% of the depreciation associated with the vehicle is deducted as a business expense for Federal Income Tax
- The cost of the vehicle is expensed pursuant to Section 179 of the Internal Revenue Code
- The vehicle is leased by an individual and the leasing company pays the tax without reimbursement from the individual
From 2006 forward, the state appropriated $950 million each tax year for reimbursements to the localities statewide. Virginia Beach City Council has set the tax relief for each year at the following rates:
- 2006 - 67.3%
- 2007 - 63.8%
- 2008 - 60.3%
- 2009 - 57.5%
- 2010 - 70%
- 2011 - 70%
- 2012 - 66%
- 2013 - 59%
Vehicles qualified for tax relief are noted on your tax bill and show a reduction for the portion of the tax the Commonwealth will pay. For qualified vehicles, your tax bill is reduced by the applicable tax relief percentage for the tax year on the first $20,000 of value. If your qualifying vehicle's assessed value is $1,000 or less, your tax has been eliminated and the Commonwealth's share is 100%. Tax relief is calculated using the City of Virginia Beach effective tax rate in effect on August 1, 1997.
You are required to certify annually to the City of Virginia Beach that your vehicle remains qualified to receive car tax relief. Therefore, it is important that you review the information sent to you to be sure that your vehicles are properly qualified. This information may be included on items such as personal property tax returns and tax bills. If your vehicle is improperly qualified or you are uncertain whether your vehicle would be eligible for car tax relief because it is used part of the time for business purposes, contact the Personal Property Taxpayers Division of the Commissioner of the Revenue. When you submit a tax payment of qualified vehicles, you are certifying to the City of Virginia Beach that your vehicle has been qualified correctly.
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