The purpose of this report is for Town Council to adopt the 2020 Tax Rate Ordinance #20-04-01 (Attachment 1), so spring tax bills can be mailed in early May.  As property taxes are based on a calendar year, the tax rate ordinance is effective as of January 1 each year.  Relevant discussions occurred during public meetings held on March 18, March 24 and April 8, 2020.

The following chart provides and overview of the various tax rates included in the Proposed FY21 Budget and the 2020 Tax Rate ordinance:

Additional information regarding each tax type is provided in the next sections:

REAL PROPERTY TAX: 

In late January, staff received the 2020 Assessment Summary (Attachment 2) of real property from Loudoun County’s Office of the Commissioner of the Revenue.  Using this data, staff prepared the Real Property Tax Revenues Estimate and Equalized Tax Rate Calculation (Attachment 3) in order to develop the FY21 Budget, advertise the real property tax rate public hearing and provide Town Council the information needed to set the 2020 real estate tax rate.  The County Assessor’s forecast for Purcellville shows a 4.03% increase in assessments for existing properties and a 1.29% increase in assessments for new construction/growth.  When these assessments are combined, the Town’s total increase in real property assessments is 5.31%.  The equalized tax rate (tax rate which would levy the same real property tax revenue as the Town levied the prior year for existing properties) is $0.212. 

Per the Town Manager’s revised recommendations during the March 24, 2020 public hearing in response to the COVID-19 emergency, no change is proposed to the Town’s real property tax rate of $0.22 in the FY21 Budget.  A public hearing was held on March 24, 2020 and the public notice advertised a maximum rate of $0.26 in order to provide Council flexibility during the budget deliberation process.  This tax will be included on the real property tax bill due June 5^th and December 5^th.

FIREMAN’S FIELD SERVICE DISTRICT TAX: 

In July 2011, Town Council adopted Ordinance No. 11-07-02, creating the Fireman’s Field Service Tax District (see Town Code Chapter 74, Article VIII).  The purpose of this district is to provide funds for the preservation of the historic property known as Fireman’s Field; construction, installation, operation and maintenance related to parks, recreational and cultural properties; sidewalks; beautification and landscaping; public parking; economic development services; and security, sponsorship and promotion of recreational and cultural activities.  The boundaries of this service tax district are the territorial limits of the Town of Purcellville. 

Per the Town Manager’s revised recommendations during the March 24, 2020 public hearing in response to the COVID-19 emergency, no change is proposed to the Town’s Fireman’s Field tax rate of $0.030.  This special assessment is based on the real property tax assessment and, under our tax system, will be included on the real property tax bill due June 5^th and December 5^th.

TANGIBLE PERSONAL PROPERTY TAX FOR VEHICLES: 

No change is proposed to the Town’s tangible personal property tax rate of $1.05 in the FY20 Budget.  This tax will be included on the personal property tax bill due June 5^th.

Qualified vehicles of fire and rescue volunteers, who are themselves qualified under Loudoun County’s “Length of Service Annuity Program,” are proposed to be taxed at a reduced rate of $0.01.

In accordance with Virginia Code §58.1-3523 et seq, the State has set the Town of Purcellville’s share of car tax relief at $201,753.34 for 2006 and thereafter.  The Town must calculate the pro rata tax relief percentage this revenue provides to qualified vehicles.  The Personal Property Tax Relief Calculation (Attachment 4) details actual 2020 Loudoun County Commissioner of the Revenue’s assessment data for qualified vehicles and the calculation of the reduced rate of relief.  The reduced relief rate for 2020 equates to 33.5% of the qualified vehicle’s tax amount up to $20,000 in assessed value.  This percentage of relief is not modifiable.

TANGIBLE PERSONAL PROPERTY TAX FOR BUSINESS PROPERTY: 

No change is proposed in the FY20 Budget to the Town’s tax rate of $0.55 for tangible personal property used in business.  This tax will be included on the personal property tax bill due June 5^th.

In order to allow ample time for staff to prepare and mail property tax bills by early May, staff requests Town Council approve the 2020 Tax Rate Ordinance #20-04-01 (Attachment 1) during the April 14, 2020 Council Meeting.  The spring tax bills are due on or before June 5, 2020.

The budget impact of this decision will affect FY20 and FY21 General Fund and Special Parks and Recreation Fund revenue.  The FY21 Budget proposes the following revenue for the recommended tax rates:

Adopt Ordinance as Drafted

“I move that the Town Council adopt Ordinance No. 20-04-01, establishing for calendar year 2020 the real estate tax rate, the tangible personal property tax rate, the tangible personal property tax relief rate, and the Fireman’s Field Service District Tax Rate.”