Vehicle-value mistake means tax rise for many
Thousands of Arkansans can expect an increase in their personal property taxes due in 2020 after a recent discovery that vehicle values provided by the state to its counties for 2019 were incorrect.
The Arkansas Assessment Coordination Division was made aware in August that values it provided to all 75 counties in January for new and used automobiles and light-duty pickups were incorrect.
“This is only for new and used auto and light truck values,” said Scott Hardin, a spokesman for the Arkansas Department of Finance and Administration. “This won’t affect boats or ATVs or anything like that.”
The error means vehicle values will change, resulting in an increase in personal property taxes due in 2020. Hardin said it appears from a review of data that vehicle values were off by less than 10%.
The only county that
won’t be affected by the mistake is Pulaski County, Hardin said. That’s because county officials decided in January not to use the recommended numbers.
“We became aware those values were suspect early on and decided not to use them,” said Joe Thompson, chief assessment administrator for Pulaski County.
The Arkansas Assessment Coordination Division is responsible for promoting and overseeing fair, equitable and uniform property tax treatment for taxpayers, local government officials and school districts across Arkansas. The organization became a part of the Department of Finance and Administration this year as part of Gov. Asa Hutchinson’s restructuring of state government.
Each year, the Arkansas Assessment Coordination Division provides values for cars and light-duty trucks to county assessors. That information is applied to vehicles assessed in each county and
is used to calculate personal property tax owed.
“The Assessment Coordination [Division] contracts with a third party who provides the [vehicle] values,” Hardin said. “As the year went on, local county assessors brought to our attention that some of the numbers were low. We confirmed this with the contractor and immediately contacted all 75 counties to provide them with the means of accessing the advised numbers.”
Hardin said the incorrect values came from Price Digests, a vehicle database company. He added that the state’s contract with the company will be evaluated at the end of the year because of the erroneous assessment.
“We have a year-to-year contract with these companies,” Hardin said. “We’ve contracted with Price Digests for more than ten years in order to provide vehicle values from the company to assessors throughout the state.”
An email sent to Price Digests requesting comment wasn’t returned as of Wednesday evening.
Hardin said the discrepancy
“I have never seen it on a scale like this before. We will usually have some difficulty with the year of date — for example, values for cars [made] in 2019 — but nothing on this scale.”
— Washington County Assessor Russell Hill
wasn’t a significant amount, but it was enough that it needed to be corrected.
“We don’t see any scenarios where this will have any effect on county budgets in 2020,” he said. “There might be some cost associated with taxpayer notifications, but besides that I don’t foresee this being a problem for counties.”
Hardin said the re-evaluations could affect businesses that use fleets of vehicles for transportation but shouldn’t have an effect on vehicle dealerships.
Bear Chaney, director for the Arkansas Assessment Coordination Division, sent out a memo Aug. 12 informing county assessors of the need to work with their software providers to implement changes and determine a process for retaining original assessment records.
“As part of the process you will also want to consider running a before and after the abstract,” he said in the memo. “While the values [the division] supplied are not mandatory, we provide the values to assist counties in attaining the correct market value.”
About 84,000 Washington County residents will be affected by the change of values, with a difference of about $2.5 million in actual revenue, Washington County Assessor Russell Hill said.
“I have never seen it on a scale like this before,” he said. “We will usually have some difficulty with the year of date — for example, values for cars [made] in 2019 — but nothing on this scale.”
In Garland County, more than 40,000 residents will see an increase in personal property taxes.
“I hate that this happened, but it was out of my control,” Assessor Shannon Sharp said in a news release.
The re-evaluation of vehicle values is expected to present unique challenges for smaller counties.
“Our staff was on top of the changes, but I know this will be a challenge for smaller counties,” Hill said. “We had the personnel to handle this, but not everyone does.”
Craighead County Assessor Hannah Towell said her office is still going through the data associated with the mistake.
“We aren’t ready to send notifications right now,” Towell said. “We are trying hard to get through them right now, but we are not there yet.”
Anyone who receives a notice will have the right to appeal the value change to the local county board within 10 days of the receipt of the notice.
As a result of the mistake, the Assessment Coordination Division has extended the statutory deadline of Aug. 19, 2019, to appeal property valuations, Chaney said in his memo.
“However, due to the short time between new notices being mailed and August 19, AACD suggests that the notice inform the property owners that they can file an appeal with the Board within 10 business days of the date of the notice if they so choose,” he memo said. “This extended deadline should apply only to property owners whose vehicles increased in value due to the updates.”
Hardin said notifications will not require bill payments or information.
“We are wary of scams being attached to this,” he said. “This is just a notification, not a bill. It’s just an information letter, and it doesn’t need info or payment.”