Increased Car Tax Penalty For Late Payment Proposed In Alexandria

ALEXANDRIA, VA — Late payments beyond a month of the car and business personal property tax could come with an increased penalty if approved by Alexandria City Council.

The proposed ordinance calls for adding the increased late fee penalty to the fiscal year 2025 budget. For late payments beyond 30 days of the due date, a penalty of 25 percent of the personal property tax bill is proposed. The penalty would remain 10 percent for late payments up to 30 days beyond the due date.

Under Virginia law, late payment penalties cannot exceed the greater of 10 percent or $10. However, state law allows a penalty up to 25 percent for late payments beyond 30 days of the due date.

The increased late payment penalty could generate $215,000 in additional city revenue in the next fiscal year, according to city staff. That is based on 3,646 people who paid the personal property tax more than 30 days late in fiscal year 2023, 64 percent of which were for the car tax.

"Making full use of allowed penalties helps strengthen tax collection tools and maximizes revenue in order to help fund all Council priorities," said City Manager James Parajon in a memo to Alexandria City Council. "Ensuring everyone pays their fair share of taxes is a tenet of good government. At the same time, the Department of Finance will broadly communicate the penalty increase in advance to ensure everyone has ample opportunity to pay their taxes on time and avoid the penalty."

First reading happens on Tuesday, second hearing and public hearing is scheduled for April 13, and final action is expected on May 1 with the budget adoption.

Some other Northern Virginia localities already implement the 25 percent penalty beyond 30 days, including Fairfax County, Arlington County, City of Falls Church and Loudoun County.