ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, November 30, 1996 TAG: 9612020031
SECTION: VIRGINIA PAGE: C-6 EDITION: METRO
DATELINE: MANASSAS
SOURCE: Associated Press
State Sen. Charles Colgan said Friday that he frequently hears from Virginia newcomers who are stunned when hit with a personal property tax bill of hundreds or even thousands of dollars.
He can relate. Colgan got the same shock some three decades ago when he moved to Virginia from Maryland.
``I've really been an opponent of the personal property tax ever since,'' Colgan said.
Colgan, D-Manassas, has proposed abolishing the personal property tax and raising the state sales tax from 41/2 percent to 6 percent. The additional sales tax revenue would be sent to localities.
A legislative subcommittee will conduct a public hearing on the proposal Tuesday in at the Northern Virginia Community College campus in Woodbridge.
The chief complaint about personal property taxes, Colgan said, is that they must be paid in one lump sum. Sales taxes are paid a little at a time, as purchases are made.
``I think it's an easier way to pay it,'' Colgan said. ``And Virginia has the lowest sales tax in the nation.''
Colgan noted that if a person buys a $20,000 car, he must pay a 3 percent titling tax of $600. If the locality's personal property tax is $4 per $100 of assessed valuation, the buyer would have to shell out another $800.
``If you take a family with two cars, then it really adds up to a lot of money,'' Colgan said.
Localities get about 14 percent of their revenue, $1.1 billion a year, from the personal property tax. The only larger revenue source is the real estate property tax, 41.7 percent.
Automobiles account for 70 percent of the personal property tax revenue in cities, 77 percent in counties and 88 percent in towns. Business equipment also is taxed.
Some local government officials have opposed Colgan's plan, arguing that the amount of sales tax needed to replace the personal property tax varies too much from locality to locality.
Colgan said he hopes to solve that problem by allowing localities that would lose money to continue to levy a personal property tax for the difference. For example, Colgan's home county, Prince William, gets about $47 million a year from the personal property tax and generates $40 million a year in state sales tax. Colgan's proposal would allow the county to continue to collect the personal property tax, but at a lower rate that would bring in $7 million a year. Colgan said he doesn't expect his legislation to pass this year.
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