HJ34 • 2026

Qualifying vehicles, certain; Dept. of Tax. to study options for abolishing personal property tax.

Requesting the Department of Taxation to study options for abolishing the personal property taxation of certain qualifying vehicles. Report.

Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Franklin, L.V.
Last action: 2026-03-06
Official status: Continued
Effective date: Not listed

Plain English Breakdown

The official source material does not provide specific details about which vehicles will be exempt from personal property tax or how much revenue local governments might lose.

Study to End Car Tax

This bill asks the Department of Taxation to study ways to end personal property taxes for certain cars and find new money sources to replace lost tax revenue.

What This Bill Does

Asks the Department of Taxation to look at how to stop taxing some vehicles as personal property.
Requires the department to analyze the financial impact on localities if car taxes are ended.
Examines different ways to end the car tax, such as removing reimbursement caps and limiting tax rates imposed by localities.
Evaluates alternative revenue streams to replace lost income from abolishing the car tax.

Who It Names or Affects

The Department of Taxation will do this study.
Local governments in Virginia may lose some revenue from car taxes and need to find other sources of income.

Terms To Know

personal property tax: A type of tax that local authorities can charge on things like cars, boats, or equipment.
qualifying vehicles: Certain types of cars and other vehicles that meet specific criteria for the study.

Limits and Unknowns

The bill does not specify which vehicles will be exempt from personal property tax.
It is unclear how much money local governments might lose if car taxes are ended.
The bill does not detail what new revenue sources could replace lost tax income.

Bill History

2026-03-06 Finance and Appropriations
Continued to 2027 in Finance and Appropriations (10-Y 4-N)
2026-02-02 Senate
Constitutional reading dispensed (on 1st reading)
2026-02-02 Finance and Appropriations
Referred to Committee on Finance and Appropriations
2026-01-30 House
Taken up
2026-01-30 House
Engrossed by House
2026-01-30 House
Agreed to by House (68-Y 25-N 0-A)
2026-01-27 Rules
Reported from Rules (12-Y 6-N)
2026-01-23 Studies Subcommittee
Subcommittee recommends reporting (4-Y 1-N)
2026-01-22 Studies Subcommittee
Assigned HRUL sub: Studies Subcommittee
2026-01-13 House
Prefiled and ordered printed; Offered 01-14-2026 26103007D
2026-01-13 Rules
Referred to Committee on Rules

Official Summary Text

Study;
Department of Taxation; options for abolishing the personal property taxation of certain qualifying vehicles; report.
Directs the Department of Taxation to study options for abolishing the personal property taxation of certain qualifying vehicles and to evaluate alternative local revenue sources in order to account for the shortfall in local tax revenues that will result from the abolition of such tax.

Current Bill Text

Read the full stored bill text

Requesting the Department of Taxation to study options for abolishing the personal property taxation of certain qualifying vehicles. Report.
WHEREAS, personal property taxation of certain qualifying vehicles is a significant source of local revenue, generating $3.95 billion for localities during the 12 months that ended June 30, 2024; and
WHEREAS, the Constitution of Virginia segregates tangible personal property for taxation by local authorities only; and
WHEREAS, attempts to end the car tax have been ongoing for decades, with the first successful attempt made in 1998; and
WHEREAS, the 1998 car tax relief plan was intended to be a full five-year phase-out of the tax on the first $20,000 of a qualifying vehicle's value based on state reimbursements to local governments; and
WHEREAS, in 2002, the General Assembly froze such reimbursements at 70 percent due to state budget shortfalls; and
WHEREAS, lawmakers and others have continued efforts to end the car tax, as demonstrated in bills such as Senate Bill No. 126 of the 2025 Regular Session and House Bill No. 1308 of the 2024 Regular Session, among others; now, therefore, be it
RESOLVED by the House of Delegates, the Senate concurring, That the Department of Taxation be requested to study options for abolishing the personal property taxation of certain qualifying vehicles. The study shall look for alternative local revenue sources in order to account for the shortfall in local tax revenues that will result from the abolition of such tax.
In conducting its study, the Department of Taxation (the Department) shall (i) analyze the financial impact of ending the car tax on localities in the Commonwealth; (ii) examine different avenues for ending the car tax, such as removing the reimbursement cap and limiting the tax rate imposed on qualifying vehicles by localities; (iii) evaluate alternative revenue streams to backfill local revenue lost as a result of abolishing the car tax; and (iv) review local taxation systems in other states that do not impose a car tax to determine whether any of such systems would be feasible to implement in the Commonwealth.
All agencies of the Commonwealth shall provide assistance to the Department for this study, upon request. The Department shall solicit input and assistance from the Virginia Association of Counties and the Virginia Municipal League.
The Department shall complete its meetings by November 30, 2026, and shall submit to the Governor and the General Assembly an executive summary and a report of its findings and recommendations for publication as a House or Senate document. The executive summary and report shall be submitted as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports no later than the first day of the 2027 Regular Session of the General Assembly and shall be posted on the General Assembly's website.