Pressure on used car market leads to increase in personal property taxes
BOONE COUNTY, Mo. (KMIZ)
The value of a car went up in the past year causing a personal property tax increase for car owners in Missouri.
Boone County Assessor Kenny Mohr sent a letter to property owners warning them of an increase in value for cars, boats, trucks, motorcycles and other automobiles. In the letter, Mohr said car owners may expect a 10-20% increase in personal property tax assessments. This increase is a direct result of the supply-chain problems the used car market is experiencing, according to the letter.
On Jan. 1, property owners should have received a personal property declaration. The deadline to file a personal property declaration for 2022 is March 1. Electronic forms and online filing are available on the Boone County Assessor's website, or the website for your county assessor.
The value of a car is determined using the October edition of the National Automobile Dealers Association official car guide. Mohr said assessors are required by law to use the October edition so taxes reflect the market value of the car on Jan. 1 of that year.
In an interview with ABC 17, Mohr provided the example of his own car, a 2018 Toyota Four-Runner, which increased in value by 14%. The car Mohr bought for $38,000 in 2018 is now valued closer to $43,000 in 2022.
"It's an atypical situation we're in," Mohr said. "I have never seen this before."
Rusty Drewing, of Rusty Drewing Toyota, told ABC 17 he's seen the value of cars on his lot increase significantly over the past two years.
"Cars don't depreciate as much as they used to," Drewing said. "If you purchased a vehicle prior to the pandemic you could see your vehicle even two years later possibly worth the same or even more than what you paid for it back then."
Mohr told ABC 17 he sent out the letter with personal property declarations to be forthcoming with taxpayers and warn them of the potential increase.
"The good thing is that hopefully once the supply chain is back and going, and vehicle dealers get their car, lots filled back up, you know, it should subside and by all means when the value of those vehicles go down, taxes will follow suit," Mohr said.
Personal property taxes are used to fund road improvements and fire protection districts, but Mohr says which school district you live in will affect your tax rate the most. For example, in the City of Columbia, the tax rate for 2021 was 6.696% of the assessed value.
To calculate the assessed value of a car, the assessor's office takes the market value and multiplies it by 33.3%. So, to calculate tax, the assessor takes the market value multiplied by 33.3% and then multiplied by the tax rate for your area. For example, a $25,000 market value car in Columbia would cost about $560 in personal property taxes.
A lot more than just cars can be declared as personal property. Taxpayers also need to declare RVs, boats, trailers, tractors and livestock.
"There are some weird things out there, I mean we tax emus," Mohr said.
