FAQ - Personal Property Taxes

QUESTIONS AND ANSWERS
FOR PORTSMOUTH RESIDENTS

The following questions and answers provide basic information to assist taxpayers in understanding the assessment of personal property taxes on motor vehicles.

1. What is generally considered personal property for taxation purposes?
Automobiles, trucks, recreational vehicles, motorcycles, trailers, boats, airplanes, mobile homes, business furniture, fixtures, equipment, and machinery and tools used in the manufacturing process.

2. How is the amount of tax to be levied on personal property determined?
The Portsmouth City Council establishes personal property tax rates each year in May. The actual tax is then computed by multiplying the property's assessed value by this rate. Additional information on current tax rates can be obtained by calling 757-393-8779 or emailing Ricek@portsmouthva.gov.

3. 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 pricing publications used are the National Automobile Dealers Association official used car guide and the official older car guide. The value taken from these books is the average loan value. If the vehicle is not listed in the guide, the value will be based on a percentage of purchase price or a percentage of the prior year's assessment.
For personal property other than motor vehicles, the assessed value is based on a percentage of the original cost.

4. What personal property is prorated?
The prorating of personal property taxes 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, airplanes, boats, and business personal property are not prorated.

5. What does prorating of personal property taxes mean?
The term prorating 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 there. Prorating means that the assessed tax on a motor vehicle or trailer will be prorated on a monthly basis based upon the number of months that it maintains situs in Portsmouth, or is owned by the taxpayer.

6. Where may local tax returns be filed?
Personal property tax returns may be filed by mail or in person at any of the four office locations of the Commissioner of the Revenue. The main office is located on the first floor of the City Hall 801 Crawford Street.

7. If I move out of Portsmouth during the tax year 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. Generally, if you move out of Virginia altogether or into another Virginia locality that prorates personal property taxes, or sell or dispose of a motor vehicle, your personal property tax for that vehicle will be prorated. You will receive a credit or a refund of taxes paid for that portion of the remaining year, provided that all other taxes and debts due the city have been paid. Approximately 40 localities in Virginia prorate personal property taxes on motor vehicles. If you move out-of-state, you are required to provide a copy of the new state vehicle registration before your tax bill can be prorated.
A temporary absence from the City of Portsmouth does not make you eligible for a prorated refund. To receive a refund you must submit proof, such as relocation papers, leases, utility bills, or tax records from another locality, that the vehicle is no longer located in Portsmouth.

8. If my vehicle is damaged during the tax year, will the tax be prorated?
No. The property's assessed value as of January 1st will be used as 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 1st and has not been repaired, an assessment appeal form may be filed.

9. What is “Filing by Exception”?
For 2006 all residents of Portsmouth will be required to register their motor vehicles with the Commissioner of the Revenue only once. Only persons with new information to report or with changes will be required to file.

10. When will I receive the Return of Tangible Personal Property form?
A Return of Tangible Personal Property form for motor vehicles, motorcycles and trailers for 2006, with pre-printed information will be mailed out to residents around the first week in January.

11. When must I return this form?
If any changes need to be made on the form, you must return the form to the Commissioner of the Revenue by March 1st.

12. If all the pre-printed information is correct, do I need to return this form?
If the pre-printed information on the form is correct, you do not have to do anything else and can discard the form.

13. What changes or updates must I make to the information shown on the form?
If the owner’s name or address is incorrect, please change accordingly. Review the list of vehicles on the form and make any necessary changes to the information shown for each one. Any change in usage from personal to business or vice versa must be correctly noted. You must indicate on the form if you have sold, traded or junked a vehicle.

14. If I have moved out of Portsmouth, do I still need to file this form?
Yes, you must notify DMV and return the form indicating your new address and the date you moved. If you have moved out of state, you must provide the date you moved and a copy of your out of state registration.

15. What is the filing deadline for reporting personal property other than vehicles?
The filing deadline for reporting mobile homes, airplanes, business personal property, and machinery and tools is March 1st.

16. When is my personal property tax payment due??
Taxes on all personal property in the City of Portsmouth are due on June 5th of that year. Taxes on motor vehicles and trailers that are moved into the city after this date will receive a supplemental bill that will be due thirty (30) days from the date the bill was issued.

17. When selling or disposing of a motor vehicle or trailer, do I need to notify anyone?
Yes. Both the Virginia Department of Motor Vehicles and the Commissioner of the Revenue's office must be notified immediately. This is the citizen's responsibility and not that of the motor vehicle dealer or new owner.

18. What are my tax obligations if I am an active duty military person maintaining Portsmouth as my legal residence?
Under the Soldier's And Sailor's Civil Relief Act, your tax liability would be to the City of Portsmouth regardless of where you may be stationed or where your vehicle may be garaged or located during the year.

19. As an active duty member of the military, would I be taxed for personal property in Portsmouth if I maintained 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 Portsmouth on personal property titled in your name only. However, personal property titled jointly with a non-military member or in the name of a leasing company would be subject to personal property taxes if the same tax was not paid to your legal domicile.
Military personnel must present a copy of current leave and earnings statement (LES), and/or copy of orders.

20. How does the City of Portsmouth determine the tax exempt status of military service personnel?
For 2006, all military personnel will receive a Portsmouth Military Vehicle Registration which will list all the vehicles currently registered in the name shown on the pre-printed form. If any information on the form is incorrect you must make the necessary changes and return the form to the Commissioner of the Revenue. You must provide a current copy of LES (leave and earnings statement) along with the registration. Once the registration and LES are properly received, your vehicle account will be coded so as to be exempt from personal property tax.

21. What vehicles are eligible for tax relief?
Per the guidelines of the state's Personal Property Tax Relief Act, a vehicle (automobile, motorcycle or 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 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 7,500 lbs.

22. Are disabled veterans eligible for relief on personal property tax?
Any single motor vehicle owned and regularly used by a veteran, who is permanently and totally disabled as certified 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) 393-8871.

23. Are persons who have motor vehicles specially equipped 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) 393-8871.