CHESAPEAKE — More than a thousand Chesapeake residents have signed a petition calling for more relief from yearly motor vehicle-related taxes and fees.
Attorney and Chesapeake resident Robert Wegman began circulating a petition this month after growing frustrated with his own tax bill and learning that many others have similar complaints. The petition calls for abolishing the tax or providing additional relief on what’s owed.
Wegman said nearly 2,000 individuals had signed the online and physical versions as of Friday. He planned to submit the petition and the signatures to City Council members and other city leaders over the weekend.
Chesapeake City Council will meet Tuesday, when it’s expected to vote on a variety of budget-related amendments and could adopt a proposed $1.6 billion fiscal 2025 operating budget, a nearly 4% increase from the previous adopted spending plan.
Personal property taxes are levied on the values of automobiles, recreational vehicles, mobile homes and business-related equipment. For years, Chesapeake has charged $4.08 per $100 of assessed value for tangible personal property such as vehicles — among the region’s lowest rates.
Wegman said his personal property tax bill for the year is roughly $3,500 for three vehicles, which includes a used Porsche. He estimates he will pay the city nearly $10,000 in taxes over the course of a few years on it, while he’s still paying it off.
He said though he’s better off financially than many on limited or fixed incomes, it’s still a challenge, particularly when such charges come on the heels of other big tax bills, such as state and federal tax returns. Personal property tax bills are due by the end of June.
“(What) I’m trying to do is let (City Council) see that thousands of people need some tax relief,” Wegman said. “We are being taxed to a point now where we’re having to reprioritize again. I’m a lawyer, and I put my federal taxes on a credit card.”
The petition asks for more tax relief beyond what’s provided through the Virginia Personal Property Tax Relief Act of 1998, which allows the state to subsidize those taxes across municipalities, granting each a flat amount that can be used to reduce taxes for the first $20,000 of a vehicle’s assessed value. For the upcoming fiscal year, Chesapeake expects to receive nearly $28.6 million — reducing what each individual owes on the first $20,000 of value by 41%.
The petition notes the amount of tax relief granted in Portsmouth, which charges $5.00 per $100 of assessed value for vehicles but provides 50% off the first $20,000. The city also supplements the allocation for added relief.
Lee Damore, a Chesapeake resident retired from the Navy, said the burdensome tax prevents him and many others from purchasing new vehicles. He owns three older vehicles, including a 2010 Ford Ranger.
“I’m paying sales tax on the vehicle when I buy it. I’m paying tax when I put a gallon of gas in. I’m paying tax when I pay a highway fee or my registration, and any tolls,” Damore said. “So the fact they charged me annually for something that I’ve already been taxed on over and over and over again just infuriates me.”
The state allocation lowered the bill for Chesapeake resident Jolene Mari, who saw a decrease of about $300 for one vehicle and nearly $400 for her husband’s. They include a 2019 Ford F-150 and a 2022 Mazda.
“It’s not like we can’t afford it,” said Mari, who also signed the petition. “That’s not really the point. But what about a single mom making ($30,000) a year? She definitely can’t afford it.”
Personal property tax rates on vehicles vary by city and have been characterized as a “hated” local tax by Gov. Glenn Youngkin, who has called for eliminating it. Vehicle assessments spiked following the pandemic due to supply chain issues in the auto industry. Over the past few years, some Hampton Roads cities have offered varying levels of relief to residents beyond a flat amount received from the state each year. For the fiscal 2022 budget, Chesapeake reduced what residents owed by lowering overall assessments.
The city expects a surplus in personal property tax revenue for fiscal 2024, which spans until June 30, as well as the upcoming fiscal year as the market continues to stabilize. In fiscal year 2025, personal property tax revenue is projected to be $76.2 million. Of this amount, $73.6 million goes to the General Fund and $2.6 million is dedicated to the Mosquito Control Commission.
“Throughout 2023, vehicle production and supply chain disruptions steadily improved and began to alleviate shortages that have characterized the vehicle market since the onset of the COVID-19 pandemic,” city staff wrote in the proposed fiscal budget. “In addition, rising interest rates changed the landscape of the vehicle financing market. This increased the overall cost of financing a vehicle purchase. Combined, these changes in the market put downward pressure on prices which are expected to normalize gradually over the next several years.”
The petition asks that tax relief be extended to older adults and disabled individuals Currently, qualifying disabled veterans can receive significant tax relief. State law allows them to exempt one automobile or pickup truck from state and local property taxes, and the city has a policy that allows those veterans to also pay a reduced rate of 9 cents per $100 of assessed value on another vehicle.
The petition also calls for the elimination of a $26 yearly license fee included in residents’ personal property tax bills. State law allows municipalities to levy those fees for each vehicle registered or garaged within the city. In 2006, the City Council replaced what was known as a “city decal” fee with the yearly license fee.
The petition calls that particular fee a “tax on top of another tax.”
“The point is, we all have to tighten our belts,” Wegman said. “And that means the city does, too.”
Natalie Anderson, 757-732-1133, natalie.anderson@virginiamedia.com
