Falls Church Car Tax Bills May Increase For Some Despite Lower Rate

FALLS CHURCH, VA — City of Falls Church residents are starting to receive car tax bills in the mail, and some may see higher tax bills due to economic factors affecting car values.

Vehicle owners and lessees living in the City of Falls Church are required to register their vehicle, display a decal and pay the car tax annually. Normally, most car values depreciate, which can lower the car tax bill for the same from the city vehicle year by year. That's not the case this year as nationwide used car demand with limited supply has contributed to increasing car values. Car production has been impacted by supply chain shortages on key parts like chips, resulting in a limited supply of vehicles and car values increasing across the U.S.

"This nationwide increase in new and used vehicle values is caused by a combination of factors," said Kiran Bawa, chief financial officer for the City of Falls Church. "There is a high demand for used vehicles, low inventory of used vehicles, and supply chain issues caused by the pandemic that creates a low inventory issue for new vehicles."

The city budget approved by Falls Church City Council temporarily decreases the personal property tax rate for cars to account for the increase in car values. The new temporary rate is $4.30 per $100 of assessed value, down from $5 per $100 of assessed value.

Even with the lower tax rate, impacts on the car tax bill will vary by the vehicle year, make, model and type. This year, approximately 85 percent of vehicles owned by city residents increased in value, compared to 15 percent increasing in value last year.

Personal Property Tax Relief Act funds from the state offset some of the car tax. When relief funds are applied, no tax is applied to vehicles with a value assessed at $1,500 or lower. Vehicles with an assessed value between $1,501 and $20,000 receive 44.05 tax relief, and any remaining value above $20,000 of a vehicle's value will not receive relief.

Car tax payments are due by Oct. 5. Payments can be made online, mailed to the Treasurer, 300 Park Avenue, Falls Church, VA 22046, or placed in the yellow drop box outside the City Hall main entrance. For payments not made online, include the bill stub with the payment.

Car owners and lessees can register their vehicle or notify the city about a moved-out vehicle at www.fallschurchva.gov/vehiclereg.