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Isle of Wight County’s Board of Supervisors will hold a March 3 public hearing on a proposed 20-cent reduction in the personal property tax rate.

According to Gerald Gwaltney, the county’s commissioner of the revenue, residents with 2013-2017 model cars can expect to see a 42% median increase on their tax bills, which are due to be mailed in April, if the rate remains unchanged. This is due to the rising value of used cars.

The 42% is the median, not the average, he explained, meaning half of all residents with 2013-2017 vehicles could expect to see their bills rise at least 42% if not more.

“It’s basically an economic situation with supply and demand,” Gwaltney said.

New vehicle inventory is down due to COVID-19 cases among the automotive manufacturing workforce, he explained. The decline in travel over the past two years of the pandemic has also resulted in fewer used vehicles re-entering the market, since there’s less need to replace them.

That, coupled with a shortage of computer chips needed to run newer cars, means vehicle values are on the rise. So are the taxes county residents will pay when their vehicles are reassessed this spring.

Currently, Isle of Wight charges a personal property rate of $4.50 per $100 of a vehicle’s assessed value. According to Gwaltney, cutting that rate by 20 cents won’t make it “revenue neutral,” where the increased valuations and rate reduction would cancel each other out and leave drivers paying the same amount they did last year. Even with the roughly $1 million revenue reduction a 20-cent tax cut would bring, Isle of Wight still expects its personal property tax revenue for 2022 to be higher than 2021.

But lessening the market’s impact to taxpayers would be “a step in the right direction,” Gwaltney said.

Smithfield drivers are particularly affected, Gwaltney said, as they pay $1 per $100 to the town on top of the $4.50 per $100 to the county, making their personal property tax burden the highest in all of Hampton Roads – even Southampton County, which charges $5 per $100.

Windsor drivers, who pay that town an extra 10 cents per $100 on top of the county’s rate, are also among the highest taxed in Hampton Roads.

The public hearing will occur during the board’s scheduled work session, which begins at 6 p.m. in the boardroom of the Isle of Wight County courthouse complex. Though the board typically doesn’t take action at work sessions, it may do so March 3 due to the impending bills that will be mailed in April.