Title
Resolution to Apply an Assessment Ratio to the Value of Certain Automobiles and Trucks as Authorized by Code of Virginia §58.1-3503(B) for the Calendar Tax Year Beginning January 1, 2022
Purpose
PURPOSE/BACKGROUND:
See Discussion below.
Discussion:
The COVID-19 pandemic caused wide spread closures and market disruptions. The automobile industry experienced shortages in workers, and equipment, particularly computer chips, which are one of the key components of every modern passenger vehicle. The inevitable result of that industry shortage is a shortage in the supply of new vehicles. That shortage lead to a substantial increase in the demand for used automobiles and passenger trucks. That demand has drove fair market values higher, for an asset that generally trends down in value over its useful life.
The Commissioner of the Revenue ("Commissioner") is required to value all taxable property at its fair market value. Pursuant to Code of Virginia §§58.1-3503(A)(3) and (A)(4), automobiles and trucks of less than 2 tons ("trucks") described therein must be valued by using a recognized pricing guide, or a percentage of cost if a vehicle is not yet listed in any such pricing guide. Those classifications include the majority of passenger vehicles driven by Hampton citizens. The Commissioner utilizes the pricing guide produced by the National Automobile Dealers Association (NADA), and 90% of total original cost (for the initial year) for automobiles and trucks not yet represented in that guide. In the normal course, automobiles and trucks are taxed based on 100% of the fair market value determined by the Commissioner. By action of Council last May, the tax rate applicable to automobiles and trucks for calendar year 2022 is $4.50 per $100 of assessed value.
For 2022, the Commissioner reports a 44% increase in the value of automobiles and trucks, due primarily to the increased demand for used vehicles described above. However, it is expected that ...
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