- Report Published -
|Leased Vehicles: the Collection, Maintenance, and Dissemination of Lessee Information|
|Department of Motor Vehicles|
|HJR 107 (Regular Session, 1996)|
|Increasing numbers of Virginians and Virginia-based businesses are choosing to lease motor vehicles rather than purchase them. As of August 20, 1996, records maintained by the Department of Motor Vehicles (DMV) contained 196,566 "leased vehicle" indicators.|
In response to the increased use of leased vehicles, the 1996 General Assembly introduced two pieces of legislation related to record keeping requirements for leased vehicles. The first, House Bill 722, was passed and signed by the Governor and codified the current collection of lessee information done by DMV. The second, House Joint Resolution 107, requested DMV to study means of collecting, maintaining, and disseminating information on leased vehicles which would support the assessment, collection, and payment of personal property taxes. To address these issues, DMV formed a Leased Vehicle Task Force. This report summarizes the findings and recommendations of that Task Force.
In accordance with Virginia statute, DMV and the local Commissioners of the Revenue hold vehicle owners, including lessors, responsible for the payment of all taxes related to specific vehicles. Vehicle owners are also responsible for maintaining current state and local registrations for their vehicles. Owners' names, addresses, and vehicle garage jurisdictions are collected by both DMV and the local Commissioners of the Revenue to support the collection of vehicle-related taxes.
However, lease agreement terms can vary from one leasing company to another, with some agreements requiring the lessee to pay registration renewal fees and other lease agreements requiring the lessor to pay registration renewal fees and other lease agreements requiring the lessor to pay these fees. Since the late 1960's, DMV has also collected and maintained the names and addresses of lessees in situations where lease agreements require them to pay registration renewal fees. This information is also provided to the local Commissioners of the Revenue for their use in mailing registration renewal notices directly to lessees.
The collection of personal property taxes, as well as fees for local registration decals, is complicated by the fact that there is no statutory requirement for statewide consistency among the 135 independent jurisdictions. Consequently, ordinances governing personal property tax assessment vary, as do administrative procedures used to collect property taxes and local vehicle registration fees. However, efforts in Northern Virginia and the Tidewater area have resulted in compacts between Commissioners of the Revenue in those localities. The compacts address such issues as proration, consistent tax due dates and collection dates, as well as decal location and cost. (*1)
DMV provides the local Commissioners of the Revenue with vehicle information, including owner's name and address and garage jurisdiction, on a routine basis. The Commissioners have the ability to obtain this information weekly, monthly, or semi-annually, depending upon their specific needs. In cases where DMV has collected lessees' names and addresses on its revised title application form, this information is also disseminated to the local Commissioners of the Revenue.
Some Commissioners of the Revenue, however, have not made the automated system changes needed to accept, store, and use the lessee information which DMV routinely provides. Commissioners of the Revenue also obtain lessee name and address and garage jurisdiction information on leased vehicles from lessees as part of their annual personal property tax filings and from lessors on listings which leasing companies provide to them annually.
Lessee name and address are important to local Commissioners of the Revenue whose localities hold lessees responsible for paying local registration fees. In addition, accurate garage jurisdiction information and prompt notification when the lessor disposes of a vehicle are important to Commissioners of the Revenue whose localities prorate personal property tax assessments. According to the Commissioners of the Revenue who served on the Leased Vehicle Task Force, there continue to be problems with the collection of accurate garage jurisdiction information in spite of the efforts DMV has made to make this information accessible to the localities. This problem exists because lessees and lessors are not notifying either DMV or the local Commissioner of the Revenue when garage jurisdictions change or when vehicles are sold.
The research conducted the Leased Vehicle Task Force indicates that the current problems with leased vehicle information relate to a need to improve notification regarding changes in garage jurisdiction and disposition of vehicle rather than to a lack of lessees' names and addresses. Consequently, there does not appear to be a need for legislation to require DMV to capture the names and addresses of all lessees. The Leased Vehicle Task Force recommends that the following administrative actions be implemented, however, to facilitate the collection of lessee information, garage jurisdiction information, and vehicle disposition information:
1. DMV has written to all leasing companies notifying them of the changes which have been made to its title application for use in collecting lessee name and address, encouraging the leasing companies to complete this information, and reminding them of the importance of notifying DMV of changes in vehicle garage jurisdiction or disposal of the vehicle.
2. The local Commissioners of the Revenue Association should write to all leasing companies informing them of the need to ensure that localities are notified immediately of any changes in garage jurisdiction or disposal of the vehicle so that proration of taxes can be done accurately.
3. The Commissioners of the Revenue should explore the feasibility of mailing out personal property tax assessments and local registration renewal notices earlier so that lessors have the time needed to forward these notices to lessees for payment when the terms of the leasing agreement hold the lessee responsible for such payments.
4. The leasing companies could take steps to provide the Commissioners of the Revenue with listings on a more frequent basis, such as quarterly. They may also wish to explore the feasibility of exchanging the required information on leased vehicles in an electronic, rather than paper, format.
(*1) The Northern Virginia Compact for Local Motor Vehicle License Enforcement was entered into by the following six governing bodies: the Town of Herndon; Arlington County; Loudoun County; Fairfax County; the City of Fairfax; and the City of Falls Church. The participating jurisdictions adopted a uniform ordinance to obtain reciprocal enforcement of local motor vehicle license display requirements. The jurisdictions adopted a uniform license display year beginning November 16 and ending November 15. The jurisdictions use a uniform decal of the same border color and same general design. Each jurisdiction agreed to reciprocal enforcement of local motor vehicle license display requirements by the other jurisdictions in the compact.
Tidewater localities have entered into a similar agreement. Participants in the compact for regional enforcement are: the cities/towns of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg; and the counties of Gloucester, Isle of Wight, James City, Mathews, Middlesex, Southampton, and York. Each jurisdiction agreed to reciprocal enforcement of local motor vehicle license display requirements by the other jurisdictions in the compact.