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Personal Property Tax - FAQ
The following questions and answers provide basic information to assist taxpayers in understanding the assessment of personal property taxes on motor vehicles.
- What is generally considered personal property for taxation purposes? Automobiles, trucks, recreational vehicles, mobile homes, motorcycles, trailers, watercraft, aircraft, business furniture, fixtures, equipment, and machinery and tools used in the manufacturing process.
- How is the amount of tax to be levied on personal property determined? The Chesapeake City Council establishes personal property tax rates each year in May. The actual tax is computed by multiplying the property's assessed value by the applicable tax rate.
- How is personal property assessed? The Commissioner of the Revenue is generally required to determine the assessed value of motor vehicles based on a recognized pricing guide, if available, or a percentage of the original cost. The publications used are the January editions of the National Automobile Dealers Association official appraisal guides. The value taken from these books is the loan value. If the vehicle is not listed in the guide, the value will be based on a percentage of the purchase price or a percentage of the prior year's assessment. For personal property other than motor vehicles, the assessed value is normally based on a percentage of the original cost.
- What does proration of personal property taxes mean? The term proration refers to the authority of a locality to collect personal property taxes on a pro rata basis - that is, generally for the portion of the year that an item is located in that locality or owned by the taxpayer. Proration means that the assessed tax on a motor vehicle or trailer will be based upon the number of months that it maintains situs in Chesapeake or is owned by the taxpayer.
- What types of personal property are prorated? The proration of personal property tax applies to motor vehicles and trailers. This includes automobiles, trucks, motorcycles, recreational vehicles, and other vehicular equipment requiring registration through the Virginia Department of Motor Vehicles. Mobile homes, aircraft, watercraft, and business personal property are not prorated.
- If I move out of Chesapeake or sell my motor vehicle during the tax year am I eligible for a refund of the personal property tax paid? Yes, in most situations. If you move out of Virginia or to another Virginia locality that prorates personal property taxes, or if you sell or dispose of a motor vehicle, your personal property tax for that vehicle will be generally be prorated. You will receive a credit or a refund of taxes paid for that portion of the remaining year, provided there are no other outstanding taxes or debts due the City. A temporary absence from the City does not make you eligible for a prorated refund. You are responsible to report any changes in residence or property ownership to DMV and the Commissioner of the Revenue. You may be required to submit documentation verifying the vehicle is no longer in the City or that ownership has changed.
- If my vehicle is damaged or becomes inoperable during the tax year, will the tax be adjusted? No. The property's assessed value as of January 1 is the basis for the personal property tax. If you feel your vehicle is below average condition because of mechanical malfunctions, excessive mileage or other reasons, you may appeal your assessment for an individual review of your vehicle's value. If the vehicle is damaged prior to January 1 and has not been repaired, an assessment appeal form may be filed.
- When must I file a Return of Tangible Personal Property form? Return of Tangible Personal Property forms are mailed out to Chesapeake residents each January. Forms for motor vehicles and trailers need only to be returned by March 1 if any preprinted information on the form needs to be changed. If all the preprinted information on the form is correct, no further action is required. Simply discard the form.
- Do I need to file the Return of Tangible Personal Property form if I have moved out of Chesapeake? Yes, return the form indicating your new address and the date you moved. Report this information to DMV prior to returning the form.
- Where may Return of Tangible Personal Property forms be filed?
Forms may be filed by mail or in person at any of the four offices of the Commissioner of the Revenue. The main office is located on the first floor of City Hall - 306 Cedar Road. Satellite offices are located in:
Return of Tangible Personal Property forms for mobile homes, aircraft and watercraft must be signed and filed each year by March 1 whether or not changes are required.
- When is my personal property tax payment due?
Personal property taxes are due to the City of Chesapeake on June 5. A supplemental tax bill will be mailed for motor vehicles and trailers moved into the City or purchased after June 5 and will be due 30 days from the date the bill is issued.
- When selling or disposing of a motor vehicle or trailer, do I need to notify anyone? Yes. When selling or disposing of a motor vehicle or trailer, both DMV and the Commissioner of the Revenue's office must be notified immediately. Note that this is the citizen's responsibility - not that of the motor vehicle dealer or new owner.
- Do I have personal property tax obligations as an active duty member of the military maintaining a legal domicile in a state other than Virginia? No. If you reside here by virtue of military orders, you would not be taxed in Chesapeake on personal property titled in your name only, if you maintain your legal residency/domicile in a state other than Virginia and the vehicle is not used in a trade or business. Military personnel must present a copy of their current Leave and Earnings Statement (LES) each year to receive and maintain this exemption.
- What are my tax obligations as an active duty member of the military maintaining Chesapeake as my legal residence? Under the Servicemembers Civil Relief Act, your tax liability is to the City of Chesapeake regardless of where you are stationed or where your vehicle(s) may be garaged or located during the year.
- How does the City of Chesapeake determine the tax exempt status of military service personnel? Each January, military personnel receive a "Chesapeake Military Vehicle Registration" form listing all vehicles currently registered in the service member's name and garaged in Chesapeake. Any incorrect information on the form must be updated and the form returned to the Commissioner of the Revenue's office by March 1 along with a current copy of the LES (Leave and Earnings Statement). Once the form and LES are received and reviewed for eligibility, your vehicle account(s) will be recorded as exempt from personal property tax.
- Are disabled veterans eligible for relief on personal property tax? Any single motor vehicle owned and regularly used by a veteran certified as permanently and totally disabled by the Department of Veteran Affairs may qualify for a reduced personal property tax rate. For further information, please contact the Commissioner of the Revenue's office at 757-382-6730.
- Are persons who have specially equipped motor vehicles eligible for relief on personal property tax? Motor vehicles which are owned and are specially equipped to provide transportation for physically handicapped individuals may qualify for a reduced personal property tax rate. For further information, please contact the Commissioner of the Revenue's office at 757-382-6730.
Personal property titled jointly with your spouse or property titled solely in your spouse's name may be eligible for exemption of personal property tax based on qualifying conditions provided in the federal Military Spouses Residency Relief Act. To apply for exemption on such personal property, the spouse of the active-duty service member must file a Military Spouses Residency Affidavit each year.
A vehicle leased by an active duty service member and/or spouse is taxable; however, it may qualify for a Personal Property Tax Relief Credit of 100% on the first $20,000 of value pursuant to a contract requiring the service member and/or spouse (the lessee) to pay the personal property tax and applies to a leased vehicle that would otherwise be tax exempt in Virginia if owned by the service member and/or spouse. For a leased vehicle, provide a copy of the lease agreement and other applicable documents.
Additional information about assessments and taxes may be obtained by contacting:
|Personal Property Assessmentfirstname.lastname@example.org||757-382-6730|
|Business Property Assessmentemail@example.com||757-382-6738|
|Real Estate Assessmentfirstname.lastname@example.org||757-382-6235|