Isle of Wight restores $4.50 car tax rate

Published 9:01 am Friday, February 24, 2023

Isle of Wight County supervisors voted unanimously on Feb. 23 to restore the county’s car tax to the 2021 rate.

The supervisors had reduced the rate 13% in 2022 from $4.50 per $100 in assessed value to $3.90 per $100 to provide relief to taxpayers amid a surge in used-car prices.

Even under the lowered rate, county staff estimated earlier this month that Isle of Wight would take in $13.5 million in car tax revenues by June 30, a 22.7% increase over the $11 million budgeted for 2022.

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Now that last year’s inflated vehicle values have for the most part decreased, County Administrator Randy Keaton contends the $4.50 rate is needed to stay “revenue neutral,” or take in the same $13.5 million come July when fiscal year 2023-24 begins.

A 2018 Ford F-150 truck, for example, was valued at $28,450 in 2021. The value rose to $33,050 in 2022 based on an assessment of regional sales by J.D. Power, a data-gathering company for the automotive industry Isle of Wight uses when calculating its car tax assessments. This year, that same truck’s value has fallen to $25,025, said Isle of Wight Commissioner of the Revenue Gerald Gwaltney.

Not all vehicles have returned to normal. A 2018 Chevrolet Silverado truck was valued at $23,900 in 2021, shot up 53% to $36,575 in 2022, and remained at $36,575 as of January, Gwaltney noted.

During a public hearing on the proposed tax rate, Isle of Wight County resident Shelly Perry urged the county to limit the increase she and other residents would see in their tax bills, noting that in 2022 she’d received a bill $250 higher despite the reduced rate.

Unlike most tax rate changes, which typically take effect July 1, the restored car tax rate will be used immediately on the semiannual bills set to be mailed in April for the first 50% of the payment. The bills will be due June 5. A second mailing for the remaining 50% will occur in the fall and be due Dec. 5.