Agenda 11/08/2005 - Laserfiche WebLink

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PPTRA History in the City of Martinsville Under the Personal Property Tax Relief Act (PPTRA) of 1998 the Commonwealth was to reimburse localities for personal property tax at increasing percentage rates based on the tax rate that was in effect in August of 1998. The reimbursement percentage was 12.5% in 1998.27.5% in 1999,47.5% in 2000, and has been frozen at 70% since 2001. This percentage reimbursement was for the first $20,000 of assessed value for vehicles that qualified for tax relief. Vehicles assessed at $1000 or less received 100% tax relief. The current personal property reimbursement amount to the locality is based on 70% of the August 1998 tax rate of $1.92 per $100 of assessment for vehicles assessed at $1,001 to $20,000 and at 100% of that rate for vehicles assessed at $1,000 or less. City Council increased the personal property tax rate to $2.30 per $100 of assessed value for tax year 2003 and it remains the same for the current tax year. The effect of the 2003 personal property rate change meant that Martinsville taxpayers are no longer receiving tax relief based on a true 70% of their original tax. Additionally, taxpayers who had received 100% of relief for vehicles valued at $1,000 or less are currently taxed on the difference (.38~ per $100 of assessed value) between the 1998 tax rate and the 2003 tax rate. In 2004, the Virginia General Assembly enacted legislation (SB 5005) that capped total reimbursement to ALL Virginia localities to $950 million effective with the reimbursement for tax year 2006. The capped reimbursement is the estimated Commonwealth expenditure for all Virginia localities for calendar year 2006 at the 70% reimbursement rate. The Commonwealth will disburse a pro rata share to each locality based on their tax year 2004 reimbursement request for tax year 2006 and forward. During the 2005 session, the General Assembly amended the budget bill (Item 503,2005 Appropriations Act) to address the cash flow problems created by SB 5005 for spring billers (which did not affect the City of Martinsville) and provided an option for local treasurers to "balance bill" taxpayers for 100% of any unpaid personal property bill for tax years 2005 and prior after the current program reimbursement expires on September 1, 2006.