- Report Published -
|A Study to Determine the Extent that Owners Receive Tax Relief for Unqualified Vehicles under the Personal Property Tax Relief Act of 1998|
|Auditor of Public Accounts|
|SJR 127 (Regular Session, 2000)|
|Senate Joint Resolution 127 required our office to review the extent to which owners received tax relief under the Personal Property Tax Relief Act of 1998 for unqualified vehicles. The 1998 General Assembly enacted the Personal Property Tax Relief Act (the Act), which provides tax relief on personal property taxes paid on the first $20,000 of value for qualifying vehicles. The Act includes provisions for the phase out of the tax on qualified vehicles over 5 years. The Act also defines qualifying vehicles and requires that the vehicles' use be for non-business use.|
We have determined that local Commissioners of the Revenue cannot enforce the provisions of the Act for determining if a vehicle's business use exceeds the levels set by statute. The current process does not provide Commissioners of the Revenue information on vehicles used for business purposes that do not qualify for tax relief under the Act.
Also, the current process does not adequately inform the public of how they should report their vehicle use to comply with the laws of the Act.
If the General Assembly wishes to have the Commissioners of Revenue enforce the provisions of the Personal Property Tax Relief Act of 1998 concerning unqualified vehicles used for business purposes, the General Assembly will need to have the following done.
1. The Department of Taxation must provide the Commissioner more information about who is claiming a deduction or expense and information about the vehicles.
2. The Commissioner must provide taxpayers information about the provisions of the Personal Property Tax Relief Act of 1998 concerning unqualified vehicles used for business purposes both when the taxpayer initially registers the vehicle and during the billing cycle. Commissioners and Treasurers must require taxpayers to certify the vehicle use at registration and billing.
3. The Department of Motor Vehicles must require vehicle dealers and leasing companies to certify use of vehicle at registration and provide this information to Commissioners.
4. The General Assembly may wish to provide some incentive to the Commissioners for enforcing this provision and defraying the cost of the information.