Senate hears proposal for state refundable credit to offset local car personal property tax; committee passes bill by indefinitely

Senator Durant presented legislation that would create a new state income tax credit equal to local personal property tax paid on personal‑use vehicles, capped at $150 for individuals and $300 for joint filers. The credit would generally target taxpayers with adjusted gross income below $50,000 for individuals and $100,000 for married couples filing jointly and include a restriction that the credit only apply in jurisdictions that do not raise the personal property tax levy by more than 2.5% in a given year.

Durant and supporters framed the proposal as targeted relief for working Virginians who continue to pay personal property tax on vehicles and said the governor’s introduced budget contains a three‑year prefunding set‑aside to pay the initial credits. Sponsors said the measure would not require additional collections from localities and that local governments would continue collecting the same vehicle taxes as before.

Opponents and some senators questioned whether the relief would help carless residents or transit users, and whether the measure was the most efficient way to use available surplus funds. Several members indicated a preference to consider tax relief items as part of the broader budget package. After extended discussion, the committee voted to pass the bill by indefinitely (PBI). The sponsor and other members said the executive budget will include related relief measures the committee will consider during budget negotiations.

Ending: The committee’s PBI action halts further immediate movement on the credit; members said they expected broader tax‑relief items to be addressed in the upcoming budget package.