County considers dropping decals, but will make up lost revenue

Bedford County's supervisors will vote, Wednesday night, on a plan to get rid of the county decals that cars must now have stuck to their windshields. The vote is scheduled to occur following a public hearing on the issue.

However, the change will be revenue neutral, which means that the money that residents paid in decal fees will be made up. Most surrounding localities, including Roanoke County, have already eliminated the decal, and some make up the difference by including a fee with the personal property tax. Bedford County has opted to get this money by adjusting the personal property tax rate. Bedford County Commissioner of the Revenue Faye Eubank noted that one of the advantages of doing it this way is that county taxpayers will be able to deduct the money from their taxable income at tax time.

Rebecca Jones, the county's treasurer, said that her office gets frequent complaints about the decals. Elderly people say it is hard to remove the old decal from the windshield and nobody likes the long lines at the treasurer's office when the tax deadline approaches.

There are advantages to county staff. It will cost $60,000 this year to print and mail out the decals and this doesn't count the time office personnel spend physically handling them.

They have also lost their value for law enforcement as 60 Virginia localities have already eliminated them. Furthermore, the county has other tools to collect tax from delinquent taxpayers. The county can send a stop request to the state Department of Motor Vehicles (DMV). This blocks renewals or transfers until the taxes are paid. The county can also collect unpaid taxes from state income tax refunds or lottery winnings. The treasurer can also use bank and wage liens.

I don't really feel like it will hurt our collections doing away with the decals, said Jones.

At present, the tax rate is $8.50 per $100, based on 20 percent of the vehicle's NADA retail value. This gives an effective rate of $1.70. The proposed new rate would be $2.35 of 100 percent the NADA trade value. This, said Eubank, is a lower value.

Eubank said that state law requires localities to use a pricing guide when determining taxable value for vehicles. It is up to the locality to decide what guide to use.

The result will be revenue neutral across the board, but Eubank notes that the effect on individuals wont necessarily be neutral. Some people will pay more and some will pay less. It depends on what vehicles residents have.

The county treasurer's office gave some examples.

A vehicle could have a NADA retail value of $17,175 and a trade value of $14,000. Under the new system, the owner of this vehicle will pay $28.47 more. On the other hand, if you have a 2003 Ford Taurus, with a retail value of $8,100 and a trade value of $5,800, the total owee will drop by $26.40. The owner of a 2000 pick-up with a retail value of $6,700 and a trade value of $4,475, will see the total amount dropped by $33.74.

The NADA trade value does not mean that is what an owner would actually get for a vehicle if it is sold. Jones notes that the county is going by book value and is not inspecting every single car and truck. The county uses the vehicle's vehicle identification number (VIN) to detrmine its NADA trade value.

By the VIN you should be able to see exactly what value should be on them, said Eubank.

According to Eubank, the county is preparing to tax for 2008 and the values in the Jan. 1, 2008, NADA book will be used.

The personal property tax also applies to boats and airplanes. Eubank said that there is a national price guide for boats and 100 percent of the lowest value will be used. Staff will have to assess airplanes.

County staff knows the new rate will indeed be revenue neutral because they have run the book value of local personal property through the county's tax software using various rates to come up with the right one.

We compiled the book as if we were going to give it to the treasurer to tax, Eubank said.

Tax is also assessed on businesses for their equipment, furniture and fixtures, machinery, tools and inventory. The tax rate on these will be $1.70, the old effective rate.

They will see no difference in their tax, Eubank said.

Eubank said that this will make Sue Montgomery's job easier. Montgomery is the county's director of economic development. The current tax rate makes it appear, to businesses considering coming to Bedford County, that the local tax burden is higher than it really is, she noted.