THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: WEDNESDAY, June 1, 1994 TAG: 9406010754
SECTION: LOCAL PAGE: D1 EDITION: FINAL
SOURCE: BY JEFF HOOTEN, STAFF WRITER
DATELINE: 940601 LENGTH: Long
The only time we like depreciation is when it comes time to pay taxes. The less something's worth, the less we pay. Especially on used cars.
{REST} Surprise.
While most used cars continue to depreciate, a number of Hampton Roads automobile owners have received - or soon will receive - personal property tax assessments that require them to pay higher taxes on cars that traditionally have declined in value.
Margaret Atkinson of Virginia Beach saw the assessed value of her 1987 Nissan Pathfinder increase from $6,475 in 1993 to $6,675 in 1994. Her taxes went from $246 to $254.
Her husband's 1983 Nissan pickup also took a hit, as his assessment increased from $1,650 to $2,050 and his payment went from $63 to $78.
``How can a 1983 go up $400 when my 1987 only went up $200?'' Atkinson said. ``They shouldn't have gone up at all, because your car depreciates every year.''
The answer? Look to the ``blue book.''
South Hampton Roads cities determine vehicle tax assessments based on the average loan value listed in the National Automobile Dealers Association's Official Used Car Guide - the bible of the used-car industry.
Thomas A. Hazelwood, Suffolk commissioner of the revenue, said Virginia state law requires cities to use a ``recognized pricing guide'' when assessing taxes, and the NADA blue book (it's actually a dingy yellow color) is used almost exclusively throughout Virginia.
Jan Ocean, managing editor of NADA's monthly guide, said the book lists average retail, wholesale and loan values determined by surveying thousands of car sales throughout the region. Ocean stressed that the book is not just a depreciation table.
``It's not a mathematical computation,'' he said. ``It's a prediction based on information from dealers and auctions.''
Ocean said that the used-car market has been strong recently because many people are holding onto their cars longer. As people have kept their older cars out of the market, the prices for some used cars have increased.
Though area officials agree that more tax assessments have increased in 1994 than in years past, they don't all agree on the severity of the trend.
Douglas Grant, Virginia Beach chief deputy commissioner of the revenue, said that only a few models have increased in value, particularly pickups and other sport/utility vehicles.
Sam T. Barfield, Norfolk commissioner of the revenue, said his office has received more complaints this year than he can recall.
``You used to count on a car losing 15 percent a year in value, but now you never know,'' Barfield said.
Some assessments have increased due to changing standards for optional equipment such as automatic transmissions. Ocean said that while a vehicle may have decreased in value, if an agency didn't make adjustments for optional equipment last year, the assessment may have increased this year.
Cities also may allow deductions for factors like excessive mileage or poor body condition.
In Norfolk, for example, residents who want to contest their assessment can bring their car to the commissioner of the revenue's office for review.
One city, Portsmouth, has decided to hold the line on increasing vehicle assessments.
``If the assessed value goes up, we hold it at the previous year's figure,'' said Nancy McLain, supervisor of personal property for Portsmouth's commissioner of the revenue.
``We do not increase it, even if the book does.''
People who think their assessment may be in error should contact their city, said Virginia Beach resident Pat Ingmire.
Ingmire originally was told that she would have to pay $171 on her 1987 Ford Ranger pickup, an increase of almost $90 over her 1993 assessment of $83.60.
After making a trip to City Hall, Ingmire was told that a mistake had been made and her actual assessment was $84.55.
``I was lucky that I had to pay only a dollar extra,'' Ingmire said, ``because other people I know have had to pay a lot more.''
In many cases, however, contesting an assessment does little good. Atkinson said she contacted the attorney general's office, her congressman, the Automotive Consumer Action Group and NADA - all to no avail.
In the end, Atkinson included a letter of protest along with her payment.
Suffolk Commissioner of the Revenue Hazelwood recalled one citizen who complained about his increased assessment on the basis that his truck was a year older.
``He suggested that he and I were a year older than the year before, and we weren't worth as much as we used to be.''
by CNB