CITY OF CHARLOTTESVILLE, VIRGINIA
                CITY COUNCIL AGENDA




 Agenda Date:           April 13, 2021

 Action Required:       Approval of Resolution

 Presenter:             Todd D. Divers, Commissioner of the Revenue

 Staff Contacts:        Todd D. Divers, Commissioner of the Revenue
                        Jason Vandever, City Treasurer
                        Lisa Robertson, Acting City Attorney
                        Rosalind Collins, Deputy Commissioner of the Revenue
                        Servilla Kidd, Deputy Commissioner of the Revenue
                        Christopher Harper, Deputy Commissioner of the Revenue

 Title:                 Establishing 2021 Tax Year Tax Relief Percentage



Background:

The City of Charlottesville receives a fixed annual grant from the Commonwealth of Virginia to
be used to apply Personal Property Tax Relief (PPTR). The program is governed by the Code of
Virginia (58.1 Chapter 35.1) and gives the locality a pool of funds, the proceeds of which must
be used to provide relief to the owners of qualifying vehicles. The Commonwealth of Virginia’s
obligation is capped and made certain; localities distribute the relief amount as determined by
local ordinance.


Discussion:

The method for computing the relief percentage is to subtract the tax year’s total tax on eligible
vehicles valued $1,000 or less (that receive 100% relief) from the total PPTR grant amount
($3,498,256) and divide the result by the total tax on the rest of the eligible vehicles’ portion of
value that is $20,000 or less.

Based on 2021 tax year early book and projections for the tax year, staff recommends setting the
relief percentage of tax on up to $20,000 value for vehicles valued over $1,000 at 40% for tax
year 2021.


Alignment with City Council’s Vision and Strategic Plan:

Establishing the Personal Property Tax Relief percentage, like establishing tax rates, is one of the
functions of a well-managed local government, which would put this under Goal 5. The first
objective is most applicable: “Integrate effective business practices and strong fiscal policies”. If the
percentage is set too high, the City may not have the full revenue it would from the tax rate set by
Council. If the percentage is set too low, the owners of qualifying vehicles may over pay their share
of the local tax burden. Therefore, this resolution applies directly to Council’s vision of a “Smart,
Citizen-Focused Government”.


Community Engagement:

Not applicable


Budgetary Impact:

None anticipated based on forecast of vehicle levy.


Recommendation:

Approve resolution setting the relief at 40% for tax year 2021.

       2021 Formula:

       1. Tax Levy on all qualifying vehicles                                =       $9,400,000
       2. PPTR used on 100% relief vehicles                          =       $    61,000
              (vehicles valued $1,000 and under)
       3. PPTR total ($3,498,256)
              Minus line 2, leaves remaining                         =       $3,437,256
       4. Levy on up to $20,000 value                                =       $8,500,000
              (of qualifying vehicles valued over $1,000)
       Divide 3 by 4                                                 =       (.4044) 40%


Alternatives:

N/A


Attachments:

Resolution
                                       RESOLUTION
                      Establishing 2021 Tax Year Tax Relief Percentage


        NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Charlottesville, Virginia that the personal property tax relief percentage on up to $20,000 value
for vehicles valued over $1,000 is set at 40% for tax year 2021.