Information for Taxpayers
Determining Qualifying Vehicles
In general, a qualifying vehicle (Va. Code 58.1-3523 and 3525) is determined by the Commissioner of the Revenue (COR) of the county, city or town where the vehicle is garaged. In order to qualify for the tax relief, the motor vehicle must be owned or leased by a natural person or held in private trust and be used for nonbusiness purposes.
The CORs are responsible for (i) determining which vehicles qualify for personal property tax relief; (ii) determining the value of every qualifying vehicle; and (iii) certifying this information to their respective Treasurer. (Va. Code 58.1-3526.B.) The COR may rely on vehicle registration information provided by DMV on semi-annual vehicle registrations, reports from lessors, and other information available to them to identify qualifying vehicles.
Vehicles Qualifying for Tax Relief
A vehicle must meet all three of the requirements below to qualify for tax relief. The vehicle must:
- Be a passenger car, pickup or panel truck weighing less than 7,501 pounds, or motorcycle; and
- Be (i) owned by a natural person or (ii) leased by a natural person under a contract requiring such person to pay the tangible personal property tax or (iii) held in a private trust; and
- Be used for nonbusiness purposes.
NOTE: If a gross weight change is recorded with the Department of Motor Vehicles that may cause a previously unqualified vehicle to become qualified (i.e., the gross weight is changed from 10,000 to 7,500 pounds), the vehicle may be considered for qualification for the following tax year.
- Passenger cars, pickup or panel trucks, and motorcycles used for nonbusiness purposes qualify for the tax relief
provided under the Personal Property Tax relief Act.
- "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 within the term "farm tractor" or "moped" as defined in Va. Code 46.2-100.
- "Privately owned" vehicles, "leased" vehicles, and vehicles held in a private trust described below qualify for the tax reduction.
- "Privately owned" vehicles are vehicles owned by natural persons.
- "Leased" vehicles qualifying for the tax relief are those vehicles leased by a natural person under a contract which requires such person to pay the tangible personal property tax on the leased vehicle. (Va. Code 58.1-3523)
- Example of a qualifying leased vehicle: A passenger car, leased by Mary Smith (a natural person), is leased under a five-year agreement. Mary uses the car for nonbusiness purposes. If Mary is required to pay the personal property tax on the car as part of her lease agreement, the car will be a qualifying vehicle and Mary will benefit from the Commonwealth's car tax relief.
- Vehicles held in a private trust and used for nonbusiness purposes.
Types of Vehicles Which Do Not Qualify
- "Motorhomes" do not qualify for tax relief because they are designed primarily for use as living quarters for human beings, as opposed to being designed for transportation purposes. (Va. Code 46.2-100)
- Farm use vehicles do not qualify for car tax relief because, as determined by the Commissioners of the Revenue Association, "farm use" is a business use.
- Vehicles held in a living trust, in general, will not qualify for tax relief because these vehicles are owned by a trust, not by a natural person. However, whether or not specific vehicles in a living trust qualify for tax relief is determined by each Commissioner of the Revenue, depending on the facts and circumstances, such as the provisions of the relevant trust, surrounding specific vehicles and trust agreements.