Staff recommends Town Council adopt the proposed Town Code amendments to authorize and facilitate transition to Loudoun County’s consolidated property tax program in accordance with the County-Town Memorandum of Agreement.

In February 2021, the Town Council approved participation in the Loudoun County consolidated property tax billing and collection program. Some benefits of the program include: Purcellville citizens will now receive a single real estate or personal property tax bill with the same due date for County and Town taxes; reduces taxpayer confusion and provides a single point of contact for assessment or billing questions; allows taxpayers to utilize the County’s online account lookup and payment portal; the net program costs are anticipated to result in savings for Purcellville allowing resources to be redirected to support other priorities. It should be noted that the County will only assume tax billing and collection activities for tax year 2022 and beyond and Town staff remains responsible for collection activities for outstanding property taxes associated with tax year 2021 and prior.

The Town’s Finance staff and Town Attorney worked with the County Treasurer, County Commissioner of Revenue and County Attorney to finalize and execute the Memorandum of Agreement specifying a program start date of January 1, 2022. In order to meet this date, the agreement requires the Town to adopt all necessary ordinance amendments by October 15, 2021 to authorize third party tax billing and collection agreements and align Purcellville's property tax due dates and business processes with those of Loudoun County.

In order to meet the October 15^th deadline, staff worked with outside municipal legal counsel, Liz Whiting, as she represented other Loudoun towns who already worked through ordinance revisions and transition to the County tax program in 2019. Ms. Whiting provided a comprehensive written review of Purcellville’s relevant ordinances and proposed changes. The Town held a public hearing to consider the proposed ordinance amendments on September 14, 2021 and received no citizen comment on this topic.

Town and County staff are currently meeting monthly to prepare for the upcoming transition and coordinate communication plans.  Loudoun County’s recent personal property tax bill, due Oct. 5^th, included a notice about Purcellville’s participation in the consolidated billing starting 2022. A special notice will also be included in both the County and Town’s November real estate bills, due Dec. 5^th.  Town staff will also push out messages in the December water bill, press/social media releases and webpage updates to be sure taxpayers are informed. The Loudoun County Public Information Office will also conduct a public information campaign.

In order to effectuate consolidation of County and Town tax bills, the tax due dates and the property’s taxable assessed value must be identical.  This requires the Town to mirror the County’s relief and exemption processes and tax due dates. The Town already utilizes the County’s Elderly and Disabled Tax Relief criteria for our real estate bill, however, relief will be expanded to the personal property tax bill. Furthermore, the vehicle license fee will change to $25, a $2 decrease from Purcellville’s current rate.  While there is no change to Purcellville’s real estate tax due dates of June 5^th and December 5^th, our personal property tax will transition from an annual due date of June 5^th to semi-annual due dates of May 5^th and October 5^th with a transition to prorated tax bills for property that was purchased or sold during the tax year. 

In order to meet the County’s tax bill production schedule, the County-Town MOA requires all towns to adopt their personal property tax rates by the end of February and real estate tax rate by the end of March.  Staff has advanced the FY23 Budget calendar and public hearing dates to accommodate this change. Although Purcellville’s personal property tax rates have not changed for many years, accelerated action will be required to manage the equalized real estate tax rate public hearing (if assessments increase more than 1%) or if real property or special tax district rate changes are considered. Furthermore, any contemplated tax process change will need to be coordinated with the County in advance to ensure software and tax bill format capability.

No budgetary impact is associated with adoption of the proposed ordinance amendments.

“I move Town Council approve Ordinance 21-09-02 to adopt Town Code amendments to authorize and facilitate transition to Loudoun County’s consolidated tax program in accordance with the County-Town Memorandum of Agreement.”