Committee holds discussion of proposed antique automobile property‑tax exemption; constitutional and local revenue concerns raised

Senate Bill 807 — a proposal to exempt private passenger automobiles that are 25 years old or older from personal property taxation — drew extended committee discussion on constitutional authority, fiscal impacts, and how the measure would interact with an existing motor vehicle property adjustment credit.

What the bill would do

Counsel to the committee summarized the substitute: the bill would make private passenger automobiles 25 years old or older exempt from personal property tax. Counsel said the Tax Department prepared a fiscal note estimating an annual revenue loss of approximately $3 million and that the local revenue impact would fall on counties and municipalities where exempt vehicles are domiciled.

Constitutional and fiscal concerns

Counsel noted 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,” and observed that the legislature can exempt property for particular purposes but that a categorical exemption regardless of use raises constitutional questions.

Mark Muico of the West Virginia Department of Revenue told the committee that, under current law, taxpayers who pay motor vehicle property taxes timely receive a rebate (the motor vehicle property adjustment credit). If SB 807 became law, the state would no longer collect the tax on affected vehicles and local jurisdictions would lose the revenue. Committee testimony included a department estimate of local losses: roughly $1,180,000 to county school boards, $790,000 to county commissions, and $170,000 to municipalities; the department estimated the overall revenue effect at about $3,000,000 annually but noted actual loss could be lower because not all taxpayers pay on time.

Committee action

Committee members asked the Tax Department and counsel questions but did not advance the bill. Counsel referenced a prior 2020 fiscal note on a similar proposal (Senate Bill 171 in 2020) as precedent for constitutional concerns.

Quotes from the hearing

Mariah, counsel to the committee: “Article 10, section 1 of the West Virginia constitution requires that all property, real and personal, be taxed in proportion to its fair market value.”

Mark Muico, West Virginia Department of Revenue: “If the provisions of this bill were were to become effective, then, what would happen is the the tax would not be collected at all. So the local governments ... would no longer be available to those local jurisdictions.”

Ending

The committee did not vote to advance SB 807; senators asked for additional information and signaled they may revisit the measure on a future day.