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CITY OF CHARLOTTESVILLE, VIRGINIA CITY COUNCIL AGENDA Agenda Date: April 11, 2017 Action Required: Approval of Resolution Staff Contacts: Todd D. Divers, Commissioner of the <br />Revenue Jason Vandever, City Treasurer Craig Brown, City Attorney Rosalind Collins, Deputy Commissioner of the Revenue Presented By: Todd D. Divers Title: Establishing 2017 <br />Tax Year Tax Relief Percentage Background: In its original form, PPTRA was a vehicle-based entitlement.  The state was obligated to provide annual tax relief to owners of all personal <br />use vehicles, with the relief computed on the first $20,000 of assessed vehicle value. In 2005, this relief was computed at 70%.  As the number and value of vehicles comprising the "fleet" <br />in each locality grew, so did the state's annual obligation.   The changes to PPTRA for years 2006 and after mark an end to this vehicle-based entitlement.  SB 5005 established a fixed, <br />annual grant to localities, 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; <br />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 <br />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 <br />of value that is $20,000 or less. Based on 2017 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 <br />vehicles valued over $1,000 at 47% for tax year 2017. This is the same as the rate for 2016 (47%) while overall number of vehicles is up and overall value up slightly, vehicles generally <br />depreciated more this year than in previous years (biggest decline since 2008 per NADA). New vehicles with higher value do not use higher amount of relief also, due to the $20000 value <br />cap in the law. Budgetary Impact: None anticipated based on forecast of vehicle levy. Recommendation: Approve resolution setting the relief at 47% for tax year 2017. 2017 Formula: 1. <br />Tax Levy on all qualifying vehicles = $8,000,000 2. PPTR used on 100% relief vehicles = $ 63,000 (vehicles valued $1,000 and under) 3. PPTR total ($3,498,256) remaining = $3,435,256 4. <br />Levy on up to $20,000 value = $7,300,000 (of qualifying vehicles valued over $1,000) Divide 3 by 4 = (.4706) 47 % Alternatives: N/A Attachments: N/A