Virginia Gov. Glenn Youngkin signed HB 1239 into law on Tuesday, giving local governments the ability to cut car tax rates and prevent huge tax hikes driven by increases in used car values.
The legislation, sponsored by Delegate Phillip Scott (R-88th District), would allow local government leadership to address the issue of increasing used vehicle values, which, in turn, would ease the burdens of buying a used car on taxpayers, legislators said. Currently, the state’s constitution mandates a 100% fair market value in property tax assessments.
“With prices soaring on the necessities that families and individuals use every day, Virginians are in dire need of relief to their wallets. I am proud to sign this legislation and work with the General Assembly to empower localities to lower the cost of living,” Youngkin said. “Many Virginians are struggling due to rising prices, now it is up to local leaders across Virginia to step up and fight inflation with real tax relief. I look forward to continuing our work to deliver real tax relief for all Virginians.”
Before the bill passed, car tax rates could not be lower than the general rate of personal property, which created a roadblock to cutting back car taxes.
The law will go into effect immediately, providing and will apply to taxable years beginning on Jan. 1, 2022, through Jan. 1, 2025.