Audit underway to address Richmond personal property tax assessments

RICHMOND, Va. (WWBT) - More than 13,000 vehicle owners in Richmond are now receiving a letter from the city’s finance department notifying them that they owe more taxes than first thought.

A City Hall spokesperson calls it an unfortunate glitch.

“Well, I mean, that’s a heck of a glitch, right? Where some people’s are tripling in value,” said Richmond City Councilmember Mike Jones.

While the one-page letter is complicated to read, in a nutshell, it says the city used the wrong method to assess 13,300 cars last year and gave those car owners a lower value than it should have.

“Overall, folks are seeing an increase, but 13,000 Richmond residents are seeing an increase that’s even greater because of an error that was inadvertently made within the finance department,” said City Councilmember Kristen Nye.

Everyone will owe more in their 2023 personal property tax bill, now due June 5. That amount will vary depending on the car.

A City Hall spokesperson says those affected by this glitch will also receive a supplemental bill. NBC12 is also learning that an audit of personal property taxes from the “glitch” year is underway.

“So it will give us a deeper dive into going back and looking at what went wrong,” Nye said.

City Councilmembers we spoke with, both on and off camera, say the situation is a mess and will be addressed.

“I think this is something we have conversations with the CAO about because it appears to be a process issue,” Jones said. “So we can have some of those questions answered offline and then report back to our constituencies.”

Requests to speak with someone inside the finance department about the issue were denied.

A City Hall spokesperson released the following statement to NBC12:

This unfortunate glitch in 2022 affected about 5.5 percent of our billing recipients, which is about 13,000 out of 241,000 vehicles. The current bills for 2023 are correct using the required methodology.

The city uses the clean trade-in value provided by JD Power Pricing to address the fair market values of vehicles as required by state code. The impacted vehicles were mistakenly assessed in 2022 using the Cost Depreciation Method, which automatically produces a smaller assessed fair market value. This glitch means that finance will need to perform a role correction. The correction to the 2022 amount will be handled in supplemental billing for the impacted owners.

The finance department has been contacting impacted taxpayers to alert them to their increased bills. It is important to note that while their 2023 tax year bill has increased, there are several factors that are driving the increase:

The reduction in PPTR rate decreased from 50.4% to 36.6 %, as approved by city council.

The use of the correct assessment methodology.

As a part of the city’s commitment to continuous improvement, the department is transitioning from MUNIS to the RVAPAY platform and has already seen improvement in performance due to the programming/systems within RVAPAY.

If a resident has a question, please call 311 or the finance department at 804-646-7000.

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