Virginia Property Tax Ridiculousness, What Similar Issues Do You Have?

My company is registered here in Virginia, which happens to be a “Personal Property Tax State”.  What that means to me is that where normally people are used to paying property tax on their homes every year (as they live in that property), I also have to pay property tax on vehicles as well as my business assets…every year.  This is the one thing I absolutely hate about being in Virginia, though I’m sure each state has their pros and cons, which I’d love for you tell me about in the comments.  Let me explain each tax so you have a clear understanding of what I deal with and pay.

Vehicle Property Tax

Don’t get this confused with sales tax…because you have to pay that too.  With sales tax, you buy a car, you pay sales tax one time, and that’s that.  Virginia also charges a yearly property tax of 4.2% (May be different based on your county) (billed twice a year) which is based on the NADA value of your car as of January 1st (so you are paying the full assessed value, even in December a year later).  It’s like paying sales tax on your car every year!  There is a little bit of relief though, especially for those with cars valued under $20,000.  For my county they offer 58% relief up to the first $20,000 of value.  So if you own a $10,000 car, your property tax due is $420 minus 58% = $176.40.  Anything over $20,000 owes the full tax amount after the initial relief up to $20,000.  So if you have a BMW for example worth $40,000…here’s the breakdown:

BMW Value: $40,000
Tax On Initial $20,000: $840
Tax After 58% Relief: $352.80
Tax On $20,000 leftover: $840

This means you will be paying $1,192.80 on top of the sales tax you already paid just to have that car.  Tack on the cost of gas and insurance, it gets quite expensive to drive a nice car.  That’s no chump change, and definitely keeps me from wanting to buy any new cars.  Keep in mind, you have to pay this EVERY YEAR…so the value may go down to $36,000 in the second year, and you’ll pay a bit less than the original $1,192.80.

Also note that any vehicle that is used for over 50% business, is not eligible for the relief and must pay the full 4.2% every year.

Business Tangible Personal Property Tax

I just found out about this one a week ago, which is really frustrating, not only because of the money, but because of the effort required to do file this.   You are required to have an asset list that you provide to the state every year of the following:

  • Property owned by the business
  • Property owned personally and used in the business on a full or part-time basis
  • Property received as a gift
  • Property that is leased or rented
  • Property that is fully depreciated or expensed for federal tax purposes

This means you need to have an asset list (and pay property taxes every year) on everything from the computers to the printers to the furniture, etc, etc.  You have to pay 4.2% of the assessed value EVERY YEAR.  There is a breakdown depending on age to figure out the assessed value:

  • 1 year old = 50% of the original cost
  • 2 years old = 40% of the original cost
  • 3 years old = 30% of the original cost
  • 4 years old = 20% of the original cost
  • 5 years and older = 10% of the original cost

To give you an example, say you own a video editing company and you have to buy a $5,000 computer.  On top of the sales tax you may have already paid, you will also pay $105 the first year in property tax (4.2% of half the original cost).  You will pay $84 the second year, $63 the third year, $42 the fourth year, and $21 every year after that, even 10 years later when it’s probably worth nothing.  This is just one computer.  Now add up all your equipment, furniture, etc, etc and see how quickly that can add up.  It’s like they don’t want you to make money.  Not to mention the hassle of having to create, maintain, and submit this asset list.  How do you know what the cutoff is?  Do I include all my pencils?

In Conclusion

There may be other property taxes that are charged, but these are the two that I am aware of.  What do you think about these taxes and how does it compare to your state?

  • Bent over for taxes

    Virginia is such a money grubbing state! The government has their hands into EVERYTHING and couldn’t care less if the taxpayer actually makes any money to live, just as long as there’s enough to PAY their nasty taxes. The VA gov can’t manage their money very well, so they just tap deeper into the VA residents pockets. Who do you go to to fight it? It’s like the southern judges, who are family members of the police. They’re all on the same team, and they are clearly against the taxpayer.

  • daniel

    I’m a young resident of the south eastern portion of VA. Hampton roads & I’ve recently graduated from high school and attending a junior college, TNCC in Hampton, VA. I aspire to start a business dealing with cosmetology, esthetics & makeup artistry but with all these taxes, to be honest I’d prefer not to. Any suggestions on places to take my business where ill make a profit without so many imposing taxes???

  • Pat

    I am a part time MD resident & a part time VA resident (taking care of elderly parent in VA.) My vehicle is tagged in MD, but housed in VA two, maybe three nights/week. I got a notice the other day in the mail that is billing me for property tax on my MD vehicle, plus a LATE FEE (??) & also a “no-tag” fee. Ridiculousness!!!

    So, here’s the best part…after I called my my money-grubbing county to ask what this is all about, the county department of taxation says I also owe for a ANOTHER vehicle I had in the state in 2005-2007!? I was taking care of my other parent back then…a similar situation, but only was doing this part time off & on from ’05-’07. Not only do I have the original fees, but late fee & penalties!

    Any suggestions? I had absolutely NO idea that I could be taxed for a vehicle I had registered in ANOTHER state!? Unbelievable…. >;-/

  • MG

    VA property taxes are absurd and are killing the middle class. A day will come when no one will pay and dime and these counties will be no more.

    They talk about living in your means etc….have you seen some of the county buildings and the overdone policing in VA?….Fairfax County’s office is like a freaking palace…People will one day rise because of what they’re doing to them

  • PL

    I’m just starting my own small biz and just found out about having to itemize my business tangible personal prop. What a load of crap.

  • KB

    Ha. I cant get new tags for my damn car cause VA has put a damn lien on it until I pay back proprty taxes!! So, Im driving on dead tags and Im a nervouse wreck everyday. I was laid off over a 1 and 1/2 ago and Im just now getting back on my feet. I stay terrified Im going to get pulled over for it. Mostly cause I cant afford to go to court. So what do I do? I have no help. Im screwed either way. I hate this damn state!!

  • JJ

    This is one of the many many reasons I’m selling my Townhouse and moving out of Virginia. Time to leave this state and this county to the crazy rich that have ruined it.

  • Carla

    Three years ago when I moved to Alexandria I was told about the many exciting things to do in VA; Ads, guides, you name it..just lot of info. Nobody ever told me there was this yearly tax thing going on. Not the dealer, not the DMV, not even the city of Alexandria when I went to buy a $30 decal you need to have if you live and park in Alexandria every single day. At least I was told about this decal by my friend, after she got her notice and found out about it.

    Is bad already to have to give them all our money but what really piss me off is why the information is not more available. They have the tools, they have the money to do it. Do not say all the info can be found in the web site because it sucks and you can hardly find usefull information as happens with all goverment sites.

    Is really simple: If you don’t know about it, you don’t pay. If you don’t pay, they charge a late fee. Smartest way to make more money.

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