Greater Car Tax Reduction Lined Up For Budget In Loudoun County

LOUDOUN COUNTY, VA — Loudoun County supervisors appeared to make a consensus on how much to lower the personal property tax rate on vehicles as well as the real estate tax rate.

During a Thursday work session, two motions were considered for use of more than $9 million originally proposed for Loudoun County Public Schools that is being replaced by more state funding for LCPS.

The motion adopted by the board was from Supervisor Caleb Kershner (R-Catoctin) to reduce the personal property tax rate on vehicles from $4.15 to $3.09 per $100 of assessed value in tax year 2026. The board voted 8-0-1, with Supervisor Juli Briskman (D-Algonkian) absent.

The $3.09 tax rate is lower than the $3.48 per $100 of assessed value proposed in County Administrator Tim Hemstreet's budget. However, the motion keeps the real estate tax rate of $0.805 per $100 of assessed from Hemstreet's proposed budget, which would be a six-cent reduction from the current tax rate.

"I am proud and grateful that my colleagues supported this motion allowing us to further reduce the overall car tax to $3.09 from $4.15," said Kershner in a statement after the vote. "The motion reduction along with reduction in the [proposed] base budget will provide Loudoun County residents a total of $24,645,000 in total car tax relief. Without question, the Board’s ability to reduce the car tax to this level is due to the generous revenue Loudoun County receives from our data center industry."

SEE ALSO: Data Center Revenue Contributes To Tax Rate Cuts In Latest Loudoun County Budget Proposal

The other motion under consideration was from Supervisor Laura TeKrony (D-Little River). That would have raised the personal property tax rate from $4.15 to $4.20 per $100 of assessed value in the 2026 tax year, which TeKrony said was the rate for 35 years. However, the personal property tax rate on vehicles would have gone down to $3.25 per $100 of assessed value in tax year 2026. It would have also reduced the tax rate to $0.80 per $100 of assessed value, which is a half-cent less than the proposed budget.

Hemstreet noted that TeKrony's proposal affected the general personal property tax rate, not just computers and peripherals affecting data centers and other businesses. The county administrator did not recommend raising the general personal property tax rate.

While some supervisors argued that raising the personal property tax increases reliance on data center revenue, TeKrony argued that the county is already there.

"That ship has sailed. We are reliant on data center revenue, Loudoun County is," said TeKrony. "Supervisor Kershner and I are in the same place. We want to give more relief on the vehicle tax because people want to really feel relief and this is the way to do it. I just think that the board has traditionally not wanted to increase the real property tax rate, and that's where we're headed."

Kershner's office estimated that the $3.09 vehicle tax rate would save $56 annually on a $20,000 car from the county administrator's proposed $3.48 rate. A vehicle valued at $30,000 would save an estimated $95 on tax bills compared to the $3.48 rate, while a $10,000 car would save $28.

Supervisors favored Kershner's option, arguing that the higher cut to the car tax rate would have a greater impact on residents. But some cautioned that there was uncertainty around the next few years amid federal government reductions.

"We're in an incredible flush year right now," said Vice Chair Michael Turner (D-Ashburn) "And everything that we do with tax rate in this year could very well in a year or two or three, we're going to have to come back hat in hand and say well 'we're sorry, remember that great tax cut we gave you three years ago? Remember the money we paid for fireworks three years ago?' We've got to get all that back because the turbulent environment has caused us to do this."

Chair Phyllis Randall (D-at large) shared support for giving "some relief now" while holding back to see how to address future needs.

"In some ways, that's an argument for lowering taxes because people are going to get hit hard," said Randall. "In other ways it's an argument for holding steady to see how we need to spend this money in some years to come, how much we need to maybe help people in other ways."

Supervisor Matt Letourneau (R-Dulles) was initially skeptical about Kershner's proposal, noting he favors looking for ways to reduce the real estate tax rate. But Letourneau said Kershner's proposal saves families more money than TeKrony's, especially families with multiple cars.

"Unless you don't own a car and you own like a million and a half dollar house, which seems pretty unlikely, you're going to save more money with this motion," said Letourneau.

Final budget adoption is expected on April 1.