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TextCar Values for Tax Assessment Purposes
NADA
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. In doing so, DTA uses the base value not including applicable adjustments (i.e., vehicle options).
DTA will consider adjustments for high mileage, and for condition under appeal.
For new model year vehicles, the assessed value is based on a percentage of MSRP. This is the base-model MSRP, not including options. 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.
2012 Car Values
Vehicle depreciation from one year to the next is the norm, and this remains true for the majority of vehicles assessed in Fairfax County for 2012. However, NADA’s valuation guide as of January 1, 2012 does in fact show some value appreciation in certain vehicle segments.
The NADA analysis found “upward value adjustments” in select vehicle segments, and indicated that it viewed these adjustments as “long-term repositioning of wholesale and retail market prices.” As further context to the market value of this segment of vehicles, the NADA cited the following in December, 2011:
- “Due to various market drivers, the values in January 2012 for some vehicle segments—light duty trucks, CUV’s and SUV’s—may actually be higher than in January 2011.”
Where value has risen, the NADA indicates this is generally due to increased demand and diminished supply caused by a number of factors, such as:
- Stabilization of volatile gas prices compared to spikes in mid to late 2008;
- Strong demand on the wholesale level due to things such as the federal “Cash for Clunkers” program and curtailed new vehicle production.
Tax Calculation
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.
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Questions? E-mail dtappd@fairfaxcounty.gov
or call DTA at 703-222-8234. |
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