Joe Winkelmann, Vice-Chairman, Center District                    February 18, 2003      

Department, Organization                                                                 Board of Supervisors

or Person Making Request                                                                    Meeting Date

J. Randall Wheeler, Deputy County Administrator

Staff Lead

Topic               Discussion of Authority to Waive a Portion of the Current Delinquent Tax Penalty Provision Relating to the Personal Property Tax Relief Act (PPTRA)


At present, Fauquier County assesses a 10% penalty on delinquent personal property taxes based upon 100% of the amount of the total tax due as of the first day of delinquency.  Personal property taxes are due October 5th of each year, or the first business day thereafter.  With the advent of PPTRA, the State government has assumed payment responsibility for a portion of the personal property taxes owed by qualified residential taxpayers.  The current PPTRA amount is 70% of the tax on the first $20,000 of assessed value for each qualifying account.

The County Attorney , in conjunction with the Attorney Generalís office, has determined that the County is without present authority to enact an amendment to the Code of Fauquier County prohibiting the Treasurer from imposing the full 10% penalty on 100% of the total tax due when there is failure to pay by the due date.  (See the attached e-mail from County Attorney Paul McCulla dated February 11, 2003 , for additional information.)

Having ascertained the absence of County statutory authority as described above, the County Attorney is seeking to determine from the Attorney Generalís Office if the Treasurer, in her own statutory authority, may refrain from imposing the full 10% penalty on 100% of the total tax due, and under what circumstances.

The purpose of this work session is to review the Treasurerís authority for waiver of penalty and to discuss whether or not the County wishes to seek legislative authority from the Virginia General Assembly in order to change its penalty provisions to apply the 10% penalty to only the portion of the PPTRA-eligible bill which is the responsibility of the local taxpayer, rather than the full 100% of the bill. 

Should the County wish to pursue enabling legislation, an option to consider is to a delay the effective date of the penalty on the PPTRA reimbursement eligible portion of the bill until November 15th.  This would allow the Treasurer the necessary time to complete the County's initial PPTRA reimbursement request to the State by early December in keeping with past practice and strikes a reasonable balance between the spirit of the Personal Property Tax Relief Act, i.e. tax reduction, and the County's legitimate need to charge penalty and interest on delinquent accounts to insure timely collection of taxes.

Fiscal Impact:

BRIGHT and Associates, the County's financial system vendor, has estimated the required program changes would cost approximately $4,600.  Analysis of the current year collection and penalty data indicates that had the above option been in effect in 2002, personal property delinquent tax penalty collection revenue would have been reduced by approximately $65,500.  The impact of this option in future years will be impacted by the State PPTRA reimbursement rates and value limits and the growth in the number and average assessed value of PPTRA-eligible vehicles housed in county.

Requested Action of the Board of Supervisors

Hold a work session.

Identify Any Other Departments, Organizations or Individuals That Would be Affected by This Request