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Committee pulls bill to exempt cars 25+ years from property tax after constitutional concerns
Summary
Senate Bill 807, which would exempt private passenger automobiles 25 years or older from personal property taxation, was removed from the committee's agenda after counsel and Department of Revenue witnesses raised constitutional and fiscal issues; committee did not vote on the measure.
CHARLESTON, W.Va. — The Senate Transportation and Infrastructure Committee removed Senate Bill 807 from its agenda after committee counsel and the Department of Revenue raised questions about the measure's constitutionality and fiscal impacts.
Senate Bill 807 would exempt private passenger automobiles that are 25 years old or older from personal property taxation. Committee counsel told members the Tax Department estimated an annual revenue loss of roughly $3.0 million if the exemption were enacted. The department's breakdown in the fiscal note cited an estimated annual loss of approximately $860,000 to the State General Revenue Fund, $1,180,000 to county school boards, $790,000 to county commissions, and $170,000 to municipalities.
Counsel explained the constitutional concern stems from Article 10, Section 1 of the West Virginia Constitution, which requires that all property, real and personal, be taxed in proportion to its fair market value. Counsel said that while the legislature may exempt property used for specified purposes under the constitution, the proposed bill would categorically exempt a class of personal property without regard to use, which raises constitutional questions.
Senator from West asked whether current mechanisms — including the motor vehicle property adjustment tax credit that functions as a timely‑paid rebate — would mean affected taxpayers simply receive refunds. Committee and Department of Revenue testimony clarified the difference: the existing rebate reimburses taxpayers who timely paid the motor vehicle property tax, shifting the burden to the state general fund; an exemption in SB 807 would prevent collection of the local taxes in the first place, reducing revenues available to local governments.
Mark Muco (Department of Revenue) told the committee that West Virginia’s treatment of property taxation is embedded in the state constitution, unlike surrounding states, and that the state’s current practice reimburses taxpayers for paid taxes rather than exempting the tax from collection. He confirmed the fiscal‑note estimates and explained that local jurisdictions would lose the identified revenue if the exemption took effect.
Given those concerns, counsel said the bill would not be voted on at this time and that the committee may revisit it in the future after further review by Finance or constitutional guidance.
