Bad news from the county. One bright spot -- at least the "incorrect" base price reflects the 7500 tax credit. Its does not appear that county is going to move on its stance that there are different Tesla Base models... think Elon will put in a call
fryfrye
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I appreciate that you’ve had considerable discussion with Heike Burke of my staff and I understand your position. As much as I’d like to accommodate you, I do not believe a value reduction on your Tesla is warranted. The basis of the law as Ms. Burke has previously referenced is to assess the fair market value of all vehicles and to achieve uniformity in assessment. Both are constitutional and statutory requirements under Virginia law.
I understand that you view the 85kWh battery to be an option. I would value your input if I am mistaken, but it’s our understanding that based on the VIN pattern of your vehicle, this version of the Model S Tesla only comes with the 85kWh battery. It’s our understanding that you can’t purchase this VIN pattern with a lower wattage battery; i.e., it comes standard on the version of the Model S you purchased.
Be that as it may, in reference to “options” I believe you are referencing our website wherein we state that “For new model year vehicles, the assessed value is based on a percentage of MSRP. This is the base-model MSRP, not including options.” This is somewhat of a misnomer and bears some editing on our part. The “base-model” MSRP is only used in cases where we cannot distinguish exactly which vehicle you have. For instance, some manufacturers started using duplicate VIN patterns within a model range, making it impossible to specifically identify which model version the owner had. The language on our website is actually a hold-over from days past when this problem was more prevalent. Today, especially with VIN decoders we obtain from manufacturers, we are much better equipped to identify the specific vehicle being valued. This is the case in your instance, wherein the VIN pattern is defined as having the 85kWh battery. In cases where we are able to identify the exact model version, we do not use the base model MSRP; we use the correct MSRP corresponding to the specific vehicle. As Ms. Burke indicated, the January MSRP we used is the $72,400. This appears to be correct.
As to the $7,500 income tax credit, as Ms. Burke stated, this is an after-the-fact financing incentive which reflects a policy goal of the government. It is not a reduction to the market value, but a credit provided on your income taxes. A good example of this can be seen in the sales tax which you paid to the State of Virginia at the time of purchase. The state sales tax was based on your full purchase price of $92,020, without any adjustment or reduction for the $7,500 income tax credit.
Finally, you asked about the apparent inconsistencies between Fairfax and Loudoun County. In truth, while all localities follow state law in the assessment of vehicles, there is some local latitude and there are some statewide differences. For example, the law requires that we use a recognized pricing guide, but doesn’t specify which value we are to use. Some localities use loan value, some use retail value, and some use average trade-in as done in Fairfax County. The goal of law is that localities assess property at its fair market value as of January 1 of the tax year. For new model vehicles, Loudoun uses 90% of the MSRP for current year models, and 75% for 2[SUP]nd[/SUP] year models. We assess at 95% in the 1[SUP]st[/SUP] year and 90% for 2[SUP]nd[/SUP] year models. We believe that this best represents fair market value and is in better harmony with the third year once actual sales values appear in the pricing guide. Our experience has been that were we to assess a lower percentage in the 2[SUP]nd[/SUP] year, taxpayers would often experience an assessment increase in the 3[SUP]rd[/SUP] year, which causes an obvious disconnect (the inference being an underassessment in the 2[SUP]nd[/SUP] year). We are uniform in our application as required by law, and I believe our process reasonably approximates fair market value.
In your case, you purchased your Tesla in September 2013 for $92,020, and paid state sales tax on this full amount. Our 2014 assessment is $65,160, reflecting 29% depreciation over that four month period. Based on my review, I am unable to conclude that the assessed value of $65,160 is beyond the fair market value as of January 1, or that our assessment is non-uniform in its application. Based on this, I respectfully decline your appeal. I will be sure to review this matter again once the pricing guide values are published next January.
I appreciate the length and thoughtfulness of your appeal and I am sorry I cannot accommodate your request.
Sincerely,
Kevin C. Greenlief, Director
Department of Tax Administration
Fairfax County, Virginia