The increasing cost of vehicles was a key driver in Arlington’s tax-delinquency rate showing a rare year-over-year uptick in new data.
“Many people do not contemplate the annual tax consequences” of vehicle ownership, county Treasurer Carla de la Pava said in a Tuesday briefing to the Arlington County Board.
As a result, some are caught flat-footed when tax bills arrive in the mail over the summer, and scramble to find the funds to pay before the early-October deadline.
De la Pava reported that the overall tax-delinquency rate of 0.163% for the county’s fiscal year ending June 30 was up from an all-time low of 0.157% a year before and a slight uptick from 0.161% in 2022.
The rate looks at delinquencies in real-estate, personal-property and business-tangible taxes. Combined, those three tax groups bring in more than $1 billion to county-government coffers each year.
The average price of a new vehicle has spiked since the pandemic, and now stands at more than $48,000. During the pandemic, the valuation of used cars, trucks and SUVs also grew significantly, owing to a lack of availability of new vehicles.
Arlington’s tax rate for personal-use vehicles is $5 per $100 assessed value with the following exceptions owing to state-government rebates:
- For gas- and diesel-powered vehicles, there is no tax on the first $3,000 of a vehicle’s assessed value and a 25% reduction on the next $17,000.
- For clean-fuel vehicles, there is no tax on the first $3,000 of assessed valuation and a 50% reduction of the next $17,000.
Those reductions came about through the 1997 election of Republican Jim Gilmore as governor on a pledge of “No Car Tax.” The legislature ultimately provided some funding to blunt the impact of vehicle taxes at the local level, but never enough to eliminate taxes entirely.
Even though vehicle prices have spiked, the state’s $20,000 threshold for tax relief has stayed constant for years. As a result, in Arlington, the average vehicle tax is about $1,700 a year, de la Pava told Board members.
Vehicle taxes make up “the lion’s share” of the $1.8 million in tax delinquencies left uncollected through the summer of 2024, the treasurer said. A similar situation had unfolded in 2023.
While delinquencies on vehicle taxes are up, the delinquency rate on real-estate taxes is the lowest on record, treasurer’s office officials said.
After the October 2023 deadline for real-estate and personal-property-tax payments, the total delinquency stood at $18 million. Using both carrots and sticks, treasurer’s office staff was able to whittle that rate down by 90% before an official year-end tally was made in August 2024.
“There are a lot of ways we can help,” de la Pava said, including installment payments and the Taxpayer Assistance Program, which provides low-cost loans through a private lender.
The treasurer’s office annually sends out about 620,000 email reminders, and for those who haven’t paid as the deadline looms, about 9,000 robocalls. Efforts are in the works to begin text-messaging, as well.
Board Chair Libby Garvey said the outreach efforts were welcomed, as sometimes people just forget they have a tax bill looming.
“A lot of time it’s older people,” Garvey said. “We try our best to help.”
Despite the spike up, the fiscal 2024 delinquency rate is among the lowest on record.
Reducing the rate has been a guiding principle of both de la Pava and her predecessor as treasurer, Frank O’Leary. When O’Leary, who died earlier this year, was first elected in 1983, the delinquency rate stood at about 8% — nearly 50 times what it is today.
