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Car Tax Relief
Per the guidelines of the state's Personal Property Tax Relief Act, a vehicle (automobile, motorcycle or pickup truck) is eligible for tax relief if predominantly used for non-business purposes and owned or leased by an individual who is responsible for the payment of personal property tax.
A vehicle (automobile, motorcycle or pickup truck) is ineligible for tax relief if any of the following apply: (1) More than 50% of the mileage for the year is for business purposes and is deducted for federal income tax purposes or reimbursed by an employer; (2) More than 50% of the depreciation associated with the vehicle is deducted as a business expense; (3) The cost of the vehicle is expensed pursuant to Section 179 of the Internal Revenue Service Code; (4) The vehicle is leased by an individual but the leasing company pays the personal property taxes by contractual agreement; (5) The gross weight exceeds 10,000 pounds (prior to a legislative change effective July 1, 2016, the gross weight could not exceed 7,500 pounds); (6) For a pickup truck to qualify for the Personal Property Tax Relief Act (PPTRA) credit, it must be registered with regular passenger state plates (NOT TRUCK TAGS).
In general, a vehicle must meet the eligibility requirements as of January 1 of the tax year in order to qualify for the Personal Property Tax Relief Act (PPTRA) credit. Changes made after January 1 that impact PPTRA eligibility will not take effect until the following year.
The 2004 General Assembly voted to cap the Commonwealth's car tax relief at $950 million beginning in 2006. Each locality's share of the $950 million is determined by the amount of its tax year 2005 reimbursement from the Commonwealth. The amount of car tax relief on each qualifying vehicle is based upon the total reimbursements received divided by the total tax projected on all qualifying vehicles. Based on these factors, the car tax relief percentage is calculated each tax year. Because the car tax relief percentage is subject to change each year, the amount of tax due on a qualifying vehicle may be impacted. For 2018, the car tax relief percentage was calculated at 48%. The car tax credit applies to the first $20,000 of value of a qualifying vehicle and applies to the tax amount only. If a vehicle's assessed value is $1,000 or less, the owner will not owe any Personal Property Taxes.