Bacon's Rebellion

Democracy Thrives in Sunlight

Turbocharged: Fairfax Car Tax Burden

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by

James A. Bacon
in

A 2020 Rav4.

by Bill Tracy

Fairfax County just mailed out its 2022 Car Tax bills, and the tax increase is substantial.

The Board of Supervisors granted us a 15% discount off of the inflated 2022 Blue Book vehicle values. That’s nice, but it looks like the Board failed to mention that the car tax was increasing for a second reason: the “subsidy” was reduced for the first $20k value of the car.

Here are some car tax facts for my personal vehicle.

Base Case last year (2021):
Bill’s 2020 RAV4 Value 2021: $ 23,725
    Tax Before Relief: $1,084
    Tax Relief/Subsidy (under $20k Value): $525
    Net Car Tax Owed 2021: $558 

Here is the tax increase for 2022 ACTUAL:
Bill’s 2020 RAV4 Inflated Value 2022 (less 15%): $27,073
    Tax Before Relief: $1,237
    Tax Relief/Subsidy (under $20k Value): $452
    Net Car Tax Owed 2022: $785

Last year I predicted (incorrectly) that I would owe a total of only $425 Car Tax for 2022. Thus, I owe about $360 more than I predicted, of which +$73 is due to the reduction in the under $20k “subsidy,” and the rest is due to inflation. In short, my 2022 car tax bill is not quite double the expected amount.

But I am a cheapskate. Reportedly, the average new car cost now is  $47,000.  That implies some NoVA residents must pay car taxes over $2,000 per year, per new vehicle, not including sales tax, and not including HUF fees for  green cars.

It’s good thing Michael Vick, known for owning a fleet of expensive cars, left the state a few years ago. Otherwise, he could owe Virginia some huge back car taxes!

Bill Tracy, a retired engineer, lives in Northern Virginia.

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39 responses to “Turbocharged: Fairfax Car Tax Burden”

  1. Stephen Haner Avatar
    Stephen Haner

    Hey, you think the local share of all the public employee raises that the pols brag about will grow on trees? Fair share, baby. The banged-up 11 year old Camry keeps on plugging and without question the reason I do not upgrade is taxes, taxes and taxes. I’m a cheapskate, too.

    1. DJRippert Avatar
      DJRippert

      But you know how liberals work … if they can’t get the money they want to waste on expanded government through car taxes they will increase property taxes. If that doesn’t work they will institute local sales taxes.

    2. Nancy Naive Avatar
      Nancy Naive

      I’d have nevah guessed…

    3. f/k/a_tmtfairfax Avatar
      f/k/a_tmtfairfax

      Haven’t you been paying attention? The new “Inflation Reduction Act” has been designed to motivate everyone to buy electric cars?

      Something must be going OK in N.C. I learned that an NFL player and N.C. native is building a house in our subdivision. I wonder why he doesn’t want to live in the Blue state where is plays.

      1. energyNOW_Fan Avatar
        energyNOW_Fan

        I’d love to know how much car tax some of the NoVA Tesla owners are paying. But unless Virginia gives subsidies for EV’s , which I am not a big fan of, more expensive EV’s sales will be slower here. I imagine affluent NoVa could have been Tesla “heaven” except the car tax issue.

        GM Bolt EV (smaller version) is in the range of $25k subtract $7500 after the new “Inflation Reduction” act, looks like a good deal for NoVA residents for whom a smaller car is acceptable. That is a vehicle that GM is pricing low to attract people to EV. So there is one “cheap skate” opportunity.

        1. WayneS Avatar
          WayneS

          At $4.57/$100 of value, a $120,000 2022 Tesla Model X would run you about $5,3000 in PPT the first year.

          Wow, that’s almost 2-1/2 times the real estate taxes my house.

        2. Merchantseamen Avatar
          Merchantseamen

          Most EV’s do not qualify for the rebate. All about the batteries have to be made in the USA. However the enviros will not let the mining happen. So 90% of the batteries are made…wait for it…In China.

      2. LarrytheG Avatar
        LarrytheG

        That EV credit is for ONLY us-made EVs.

      3. DJRippert Avatar
        DJRippert

        Unfortunately for the NFL player, he will pay income taxes where he practices and plays.

  2. Deborah Hommer Avatar
    Deborah Hommer

    My Nextdoor Neighbor has lots of angry folks venting about this issue. Maybe the pocketbook will assist these people in voting otherwise. Not holding my breath as ideology is pretty deep seated here.

    1. f/k/a_tmtfairfax Avatar
      f/k/a_tmtfairfax

      It costs a lot of money to run two pension plans for both county and school employees.

      1. Deborah Hommer Avatar
        Deborah Hommer

        I bet. This website illustrates the exponential increase in taxes in Fairfax County. No excuse for this. For instance, FCPS spending has increased 6x faster than enrollment. Unacceptable. http://www.fcta.org

        1. Dick Hall-Sizemore Avatar
          Dick Hall-Sizemore

          The vast bulk of a school system’s budget is personal services. So, you think teachers should get raises only proportionate to the increase in enrollment?

          1. Deborah Hommer Avatar
            Deborah Hommer

            Not necessarily. I can’t remember the details; however, a decade ago when I was awakened to some of the shenanigans going on in Fairfax County, an email made its rounds on the enormous waste in the budget. It’s the exponential waste that I struggle with. I just don’t like to be wasteful as it impacts others, namely the taxpayers – many of whom are really struggling right now with the inflation and gas taxes. I wish I would have saved the document.

          2. f/k/a_tmtfairfax Avatar
            f/k/a_tmtfairfax

            Dick, when I was involved in reviewing budgets for FCPS, we found that the Division regularly used different ways of expressing budget items that purposely made it harder to compare line items for year to year. The Division regularly distorted the requirements of the SoQs to claim non-required spending items were required.

            We asked FCPS annually to prepare a baseline budget that truly reflected state and federal mandates and not a penny more. Then we asked FCPS to show additional spending for things they wanted to do, along with the result the extra spending or additional project was supposed to produce and, finally, how FCPS would measure the results. We would not even get a response. The request was simply ignored.

            FCPS is such a dishonest institution that it is comparable to Donald Trump in terms of honesty.

          3. DJRippert Avatar
            DJRippert

            The quote is about FCPS spending overall, not teacher raises in particular. A reasonable metric would be FCPS spending vs enrollment + inflation.

    2. WayneS Avatar
      WayneS

      My Nextdoor Neighbor has lots of angry folks venting about this issue.

      You can always file a noise complaint…

      😉

  3. LarrytheG Avatar
    LarrytheG

    The irony is the Gilmore car tax relief thing that we also pay for through our state taxes – then the state “reimburses” the localities!

    It’s no secret in many localities – even outside of NoVa that they trade higher taxes on newer cars for lower taxes on real estate – the idea being that older folks on fixed incomes may have a house and and older car.

    We do that in Spotsylvania and I can tell you our school system is nothing like Fairfax in terms of services or costs but the taxes are still in your face on cars and properties are assessed at the top of the comps. A 3 acre unimproved parcel NOT on water/sewer but well/septic can easily be assessed at 100K. And a 2021 Honda CRV is well over $1000 tax.

    No, we are not one of those tax & spend “liberal” counties. One half of our BOS is hard-right GOP and 4 out of 7 School Board are hard-core right.

    Hanover gets all the attention but Spotsy is in the same church, different pew.

    1. f/k/a_tmtfairfax Avatar
      f/k/a_tmtfairfax

      But the alternative would be for Northern Virginians to see more of their state tax dollars subsidizing low real estate taxes in the rest of Virginia. The car tax relief plan simply helped the residents of NoVA.

      1. LarrytheG Avatar
        LarrytheG

        I don’t see how TMT. You STILL Pay high taxes and the “tax relief” (that you also pay for) is essentially a hidden tax.

        If Fairfax had to consider the total tax on cars and there was no hidden tax subsidy from Richmond, they WOULD have to face voters on uber tax rates.

        The entire premise behind the Gilmore boondoggle was to force localities to “cap” the car taxes and the state would “help” them do so by covering their gaps.

        totally convoluted idea and pretty sure the “cap” idea no longer works…

        What is the state involved in local tax issues to start with?

        The basic idea is that local leaders decide tax rates and are held accountable by voters.

        by hiding the true cost of taxes , it really undermines the concept of local taxation- local accountability.

        1. f/k/a_tmtfairfax Avatar
          f/k/a_tmtfairfax

          Larry, think about it. Much of RoVA is deadbeat land. They get huge amounts of state aid without a requirement for a minimum local tax effort. Indeed, many local governments routinely reduce real estate taxes whenever state aid is increased. A list of localities that did this after Mark Warner’s tax/spending law increased local support for schools was posted on BR. As I recall, about 49 localities were able to reduce local support for public schools the year after the financing changed. This practice was also confirmed by Senator Janet Howell and the late Delegate Vince Callahan.

          NoVA, on the other, sends many more income and sales tax dollars to Richmond than it receives in services or state aid. Senator Howell, at my request, has the Senate Finance Committee staff calculate that, in the first year, after the Warner tax and spending changes took effect, it cost Fairfax County residents about $113 million in added state taxes to get about $13 million in new state money. That’s the kind of deal that the WaPo pushed for editorial after editorial.

          And residents’ real estate taxes have gone up annually irrespective of how much money Richmond sends back in return.

          On the other hand, the bulk of car tax relief goes to NoVA. And where does it come from? State taxes of which NoVA pays a disproportionate share. Car tax relief returns state tax dollars to NoVA residents – dollars absent the car tax relief program, would likely flow to RoVA.

          With inflation, the amount of state car tax relief has diminished. But it still returns money sent to Richmond back to the people who paid it.

          1. LarrytheG Avatar
            LarrytheG

            TMT, do you really think RoVa is paying higher taxes that go to NoVa?

            It’s NoVa folks that are paying the higher taxes at the State level that then is used to send car tax relief back to them.

            NoVa is, in essence, self-funding it’s own car tax relief not RoVa.

            You blame liberals, WaPo and Dem leaders for this!

            It’s been this way for decades, guy long before Warner and Kaine!

            And you still forget the composite index that determines ability to pay – the match required. NO way around that. RoVa has to pay according to that formula.

            It’s a myth that they can reduce their taxes according to how much state aid.

            THe truth is, they can’t get the state aid unless they provide the match required.

          2. f/k/a_tmtfairfax Avatar
            f/k/a_tmtfairfax

            Larry, please read carefully. RoVA doesn’t pay a fair share of local taxes. All states send money from wealthier areas to poor areas. But many other states also require each local government receiving state aid to impose and maintain a local tax level at a specified level. For example, in order to receive $10 million from the state, the local government must impose local taxes of say $5 million to make up numbers.

            But that’s not the case in Virginia. Let’s use the same hypothetical facts. Let’s assume that local government A needs $14 million to operate. It gets $10 million from Richmond and taxes its residents and businesses $4 million.

            The next year, A needs $15 million to operate, but state aid (the bulk of which comes from state taxes paid by NoVA) jumps from $10 million to $12 million. Under Virginia state law, the BoS or city council can cut the local tax rate to $3 million. It’s been documented that this phenomenon occurs. The SOQ formula does not prevent a reduction in local tax support for public schools. It’s only used to calculate the amount of state aid each locality gets.

            You claim that cutting local tax support for public schools is not permitted under Virginia law. Please provide the source for this claim.

            You are correct in that NoVA taxpayers fund their own car tax relief. But think about this. But for the car tax relief program, NoVA residents would pay both the state taxes that enabled the relief and the car tax relief. And, given state funding practices, the former would likely be spent providing more aid to RoVA than coming back to NoVA. Recall the calculations made by the Senate Finance Committee Staff.

            Who do I blame? The idiots in the NoVA delegation that voted for Warners tax & spending changes, which, by the way, are still in effect, the dishonest media that could have easily disclosed these facts (except that avoiding tax increases is inconsistent with editorial policy) and mostly the even more idiotic, well-educated buffoons residing in NoVA who are too dumb to take the time to learn what’s going on.

            And less you forget, Democrats Steve Shannon and Chap Petersen fought unsuccessfully to stop the bill unless the new school aid money came back dollar for dollar. But the human filth on the Post editorial board and the opposition of the Fairfax County Chamber of Commerce (controlled by real estate developers looking for more taxpayer-funded handouts) beat Shannon and Petersen into the ground.

          3. LarrytheG Avatar
            LarrytheG

            Let’s keep it short. Most rural localities 1/2 to 3/4 of their budget is schools and how much they get from the state is determined by the LCI “ability to pay” which is based on the following:

            you should read this:

            https://uploads.disquscdn.com/images/5b501eb01d563932f84dea5cc4d0c781b78d964976f96fe9a811749771b6f7ef.jpg

            https://slidetodoc.com/overview-of-k12-education-funding-in-virginia-direct-2/

            how does this allow them to reduce their local taxes and still get the money if the formula looks at these other factors to determine their ability to pay?

          4. f/k/a_tmtfairfax Avatar
            f/k/a_tmtfairfax

            Larry, look at slide 21 of your attachment. The ability to pay formula considers: 1) true value of real estate in the locality; 2) adjusted gross income; and 3) taxable sales.

            There is no tax rate component in the real estate part of the composite index of ability to pay. The formula ignores what each locality actually taxes but rather, assumes that localities with high valued real estate can bring in more tax revenue than localities with low valued real estate.

            Fairness would dictate that the formula require that each locality apply at least a minimum tax rate to that true value of real estate. Let’s say this is 1.5% of the true value of the real estate. Thus, locality A with $500 million would have to raise $7.5 million in local real estate taxes for schools. Locality B with $500 billion would need to raise $7.5 billion in local real estate taxes for schools.

            Then the SOQ formula would show the funded expenses for A at $25 million. Ignoring all other sources of funding, the state would pay $17.5 million contingent on Locality A bringing $7.5 million to the table. That’s not done today.

          5. LarrytheG Avatar
            LarrytheG

            TMT – they look directly at other metrics to determine the required match.

            They look at metrics like the value of the real estate, the gross income and sales tax – and relative to population and ADM.

            The formula does not care what the real estate tax rate is at all . It does not care HOW the raise the required match. It could be with other taxes besides real estate.

            Some localities have large individual property owners – like Bath has Dominion – they get very little state aid and have to fund almost all of it themselves.

            I have homework for you,

            See if you can find out how NC does this and report back.

            I’d appreciate it.

  4. DJRippert Avatar
    DJRippert

    If you are a retired engineer, why do you live in Northern Virginia? I’ve lived here almost my entire life. My youngest son has two more years of high school. I still work. As soon as he graduates I am gone. Northern Virginia has become a cesspool of tax and spend liberalism. There will never be a day when the liberals who now run NoVa declare that they have enough taxes. They will always want more. Once upon a time, the strict implementation of Dillon’s Rule let the state government keep the localities in check. While this had some definite downsides, it did prevent runaway taxation. Now, the state government has taken a strong left turn. Taxing and spending at the state level has been growing faster than the combination of inflation and population growth.

    My advice is not to wait for Virginia to become California. That’s well on the way.

    Join the many other people fleeing blue states. Move to Florida, Texas, etc. Once a state becomes infected with tax and spend liberalism it doesn’t turn back. Take your income, assets, estate, etc and flee.

    There is no hope for NoVa or the Commonwealth of Virginia.

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      We got our foot stuck in the door, our children moved here from NJ but NoVA is catching up fast to NJ. The thing is such high tax on cars is a problem.

    2. energyNOW_Fan Avatar
      energyNOW_Fan

      We got our foot stuck in the door, our children moved here from NJ but NoVA is catching up fast to NJ. The thing is such high tax on cars is a problem.

    3. Matt Adams Avatar
      Matt Adams

      NOVA will price themselves out of people who can afford to live there. Anyone who owns their house will sell for a super premium and move else where. At the end of the day the district might as well annex it, because that’s all it will serve as a part of.

      The median house price in 2016 was $636,000.

  5. Nancy Naive Avatar
    Nancy Naive

    Pick yer poison;
    Income,
    Personal Property,
    Real Estate,
    Estate,
    Sales,
    Liquor,
    Cigarette,
    Etc…

    Got to have money to make your life better. That crawl space ain’t gonna hold but so much trash.

    1. Stephen Haner Avatar
      Stephen Haner

      People like Sherlock want all us taxpayers picking up the rental for people who have to leave condemned apartment buildings…Adds up. My son in from Texas and we’ve been comparing, and he loves not paying income tax but clearly pays more RE and sales and use than we do.

      1. Nancy Naive Avatar
        Nancy Naive

        When I moved to Texas, I determined the only savings was about $50 for the 15 minutes of my time at not having to fill out the 760. Gasoline was more expensive where they make it. Go figure. The lack of personal property tax on the car was a big deal. There were far fewer smoking old Camry clunkers on the road.

    2. energyNOW_Fan Avatar
      energyNOW_Fan

      I am not saying no taxes.
      Taxing the “living daylights” out of cars, annually, has been a long term problem for Virginia. We probably need further “relief” on car taxes, which could mean increasing other taxes. But also, if we did not tax cars so darn heavily, people would buy more and pay more sales tax etc.

      1. Nancy Naive Avatar
        Nancy Naive

        I’ve said many, many times on PPT that taxing deprecating assets is stupid. Now, if you don’t tax them then fees on them will go up, albeit, not anything like 4% on assessed value. And I’ve also said a combination of a fixed RE tax with a gains at sale would be better. Less susceptible to fudging, complaining, and “bubbles”. Constant income stream — that’s what cities and local governments need.

  6. WayneS Avatar
    WayneS

    When Toyota introduced the Rav4 in 1994, the vehicle cost as little as $2,400 to buy.

    That is not correct. A 1994 RAV4 can be had for about $2,400 now, but back in 1994 they cost around $12,000 to $15,000, depending upon what options you chose.

    It has been a very long time since any new automobile could be purchased for $2,400 in the United States. Even the Yugo retailed for $3,900 in 1985.

    1. James A. Bacon Avatar
      James A. Bacon

      You’re right. My bad. I’m deleting the cutline.

  7. James Kiser Avatar
    James Kiser

    Explains why so many people are getting Farm Use plates.

  8. Merchantseamen Avatar
    Merchantseamen

    You know they have people in the back room working overtime to separate you from your monies.

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