VIRGINIA, USA — Virginia Gov. Glenn Youngkin believes residents shouldn’t have to pay property taxes on their cars anymore.
On Wednesday, the governor presented a budget for 2024-2026 to the General Assembly’s Joint Money Committee, which included tax reform.
The “Unleashing Opportunity” budget proposed cutting income tax rates for all Virginians by 12%. It also offers a tax credit for low-income Virginians.
While presenting the budget proposal, Youngkin commented on eliminating the personal property tax on vehicles.
"The car tax belongs in your trash can, not in the mailbox," said Gov. Youngkin.
He explained that ending the car tax wouldn't be an easy process.
"Eliminating it permanently is complicated. I both invite and challenge my colleagues in the General Assembly to work with me," he said. "To work with me to completely eliminate the hated car tax, and replace it with a further increase in local sales taxes," said Youngkin.
In 2020, the tax rate for personal property tax was 3.96%, by 2022 it was up to 4.05%. The rate is determined by local municipalities, so rates differ from county to county.
Each county has its own way of determining a car’s value. Fairfax County uses J.D. Power to calculate the trade-in value for used vehicles. Earlier this year, both Fairfax County and Prince William County extended the due date, giving residents more time to pay their car tax.
The car industry has been in shambles since the pandemic. Production has been slow for different reasons. Making used cars more in demand since they’re more accessible. However, this shift caused the value of used cars to skyrocket almost as high as new cars.
As a result, Virginia residents received higher tax bills this year compared to last. WUSA9’s Matthew Torres spoke to a Fairfax resident who told him that her bill had increased by $400 in 2023. Despite her car being older, with an additional 15,000 miles on it.
On Thursday, when Gov. Youngkin was asked about the issues facing residents, he claimed to hear complaints from friends and constituents every single day on the personal property tax.
“It is by far the most hated tax and it may be the most hated element of living in the Commonwealth of Virginia.” Gov. Youngkin said in a press conference following a meeting with the General Assembly.
To combat this issue, the governor suggests raising the state’s sales tax and closing the big tech tax loophole to eliminate the car tax altogether.
"I think we need to take him up on that offer and work to eliminate it," said Fairfax County Supervisor Pat Herrity, who represents the Springfield District.
He told WUSA9 that it's absolutely doable.
"Especially because the Governor has made it clear that he doesn't want to put the entire burden on localities," said Herrity.
He says it would pose some challenges.
"It's a significant amount of revenue to Fairfax County. So, we would need to figure out how we're going to make up for the revenue. But, the Governor has laid out one way to make up for the revenue. Our budget has gone up 50% in ten years, our real estate tax has gone up 50% in ten years. We've got room to cut the tax for our resident's benefit," said Supervisor Herrity.
"People hate this tax. It is one of the things that makes Fairfax County in Virginia unaffordable. We spend a lot of money chasing cars that are registered in Maryland. People do anything they can to avoid it. People park cars in other states to avoid it," he said.
Senator Scott Surovell, who represents District 36, told WUSA9 the Governor's proposal is a joke.
"I haven't met a single constituent that likes the car tax, but I also haven't met a single constituent who likes going to the dentist," said Sen. Surovell.
"The only way for the state to fund the repeal of the car tax, if we were to replace that revenue, is to defund higher education, defund mental health. We'd have to defund our health care program. We'd have to raise taxes. It's not a serious proposal, it's a joke. If he was serious about trying to govern this state he would put something into to his budget, he would show us what he proposes to do, instead of just throwing out a tax cut," said Surovell.
Virginia isn’t the only state that has a personal property tax for cars, 24 other states do as well. However, Virginia’s car tax is the highest in the entire country.
“The car tax belongs in the trash can, not in your mailbox” says Governor Youngkin.