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Bedford County's supervisors voted last week to accept a plan to eliminate personal property tax decals.
The measure passed unanimously although two supervisors, District 2 Supervisor Chuck Neudorfer and District 3 Supervisor Roger Cheek had reservations about it. Board Chairman Steve Arrrington and District 6 Supervisor Annie Pollard were absent.
Rebecca Jones, the county's treasurer, told the supervisors that modern technology means that the decals, which prove that personal property tax has been paid for a vehicle, are the primary means of law enforcement. For example, a hold can be placed with the state Department of Motor Vehicles (DMV) that keeps a delinquent taxpayer from renewing a license on the vehicle. Jones' staff can place this hold, via computer, from the treasurer's office. A delinquent taxpayer's state tax refunds or lottery winnings can also be used to pay their tax bill.
Jones said that technology changes have eliminated the need for the decal as an enforcement tool and eliminating them will save the county $60,000 per year. The decals fees bring in $2 million in revenue, but recovering this revenue through the personal property tax rate means that the money taxpayers are paying can be deducted from their federal income tax. The decal fees at not deductible.
Faye Eubank, the county's commissioner of the revenue, said that changing the personal property tax rate schedule will be an improvement. Prior to the vote, the tax rate was $8.50 per $100 of 20 percent market value. This made the county's personal property tax appear to be higher than it really was. The effective tax rate was $1.70.
The new tax rate is $2.35 of 100 percent the NADA trade value. Although the NADA Web site shows three trade values, clean, average and rough, Eubank said that the NADA books that the county get show only one trade value, the clean trade value. This year's taxes are based on the Jan. 1 NADA book. Eubank notes that there are 90,000 vehicles registered in Bedford County and county staff can't hand assess each one.
Eubank told the supervisors that the switch was made from retail to trade because she felt this is a fairer value. She said state requires commissioners of the revenue to use a unified pricing guide and to use the guide's January edition for the year being taxed.
The change in the personal property tax is to be revenue neutral, according to Eubank. This means that it won't bring the county any additional tax money. It does not mean that everybody's tax bill will be the same, plus the $25 that they paid for the decal, as it was last year.
I would not support this if I thought this was a back door way to raise revenue, District 1 Supervisor Dale Wheeler said. I don't think this is designed to make money for the county.
The change will affect the percentage of personal property tax relief taxpayers get. The state capped this relief at a fixed dollar amount for each locality. Using the tax rate to take the money that formerly came from the decal fee means that the personal property tax relief percentage is now 54 percent.
Neudorfer was concerned about the change's impact on companies with large dump trucks. Eubank said that her office will work with taxpayers to see if there are problems. She said that her office has authority to make adjustments in areas that don't affect the tax rate and she expects to do a lot of individual work this year.
In other business, the supervisors voted unanimously to add an additional 7.7 acres to the amount of land that the Public Service Authority (PSA) leases from the county. According to Brian Key, the PSA's director, the land is needed because it needs to build storage space and this would cause it to exceed the zoning ordinance's limit on the percentage of its parcel that can be covered by buildings or parking lots. Expanding the size of the parcel eliminates that problem.
We have adequate office space now, said Key. What we really need is storage space.
County Administrator Kathleen Guzi said that expanding the parcel's size is cleaner than granting the PSA an exemption from the zoning ordinance requirement.
The lease is a 40-year lease.