Car Values for Tax Assessment Purposes
Section 58.1-3503(A)(3) of the Code of Virginia specifies that for most vehicles, the value shall be taken from “a recognized pricing guide.” According to the Weldon Cooper Center for Public Service with the University of Virginia, “For valuation of automobiles, all localities use the National Automobile Dealers’ Association’s Official Used Car Guide (NADA) as their primary valuation guide for cars and sport utility vehicles. When a vehicle is not listed in the primary guide, the locality obtains values from some other source. All cities and counties in Virginia levy this tax on motor vehicles.” In all Virginia localities, the Car Tax assessments are based on the value as of January 1st (Virginia Code, Section 58.1-3515).
Localities are allowed to use the pricing guide values that include all applicable adjustments, or just use the base value for vehicles specified in the guide. Localities are to use either average retail, wholesale (or trade-in), or loan value, so long as these values are applied uniformly within classifications of property.
Like all other localities, Fairfax County obtains car values from the Eastern Edition of NADA’s Official Used Car Guide. Specifically, the Department of Tax Administration (DTA) uses the clean trade-in value published in the January edition of the pricing guide.
For new model year vehicles, the assessed value is based on a percentage of MSRP. NADA Guide values are used for subsequent years. Discounting from the MSRP provides a uniform assessment for each class of new model vehicles, and generally provides a reasonable but conservative depreciation curve when compared to the values in next year’s pricing guide.
Vehicle depreciation from one year to the next is the norm, and this remains true for the vast majority of vehicles assessed in Fairfax County. However, the National Automobile Dealers Association’s (NADA) valuation guide can show some value appreciation (increase) in certain vehicle segments in any given calendar year.
New and used vehicle values can fluctuate from one year to the next based on many factors such as economic stability and consumer confidence, interest rates and availability of financing options, dealer incentives and issues of supply and demand. The NADA value guide captures the nuance of annual price fluctuations in its market based value data.
Vehicle assessments can be appealed based on vehicle condition or high mileage as of January 1st: www.fairfaxcounty.gov/dta/pdf_files/ppappeal.pdf. If you have valuation questions, please e-mail firstname.lastname@example.org or call 703-222-8234.
Local car tax bills are a function of the tax rate times each $100 of assessed value. In other words, take the value of the car as assessed by DTA, divide by 100, and multiply the result by the tax rate (which is $4.57 for most vehicles).
For personal use vehicles, a substantial part of this bill is then subsidized by the state’s Car Tax Relief program. The amount of subsidized relief is stated on each bill as applicable.
Questions? E-mail email@example.com
or call DTA at 703-222-8234.