CHARLESTON, W.Va. (AP) — It will not disappear until July 2008, but the end can’t come soon enough for critics of the long-derided privilege tax on vehicle registrations.
Gov. Joe Manchin noted its nickname, the ‘‘Welcome to West Virginia Tax,’’ at a Tuesday ceremony marking his approval of legislation abolishing it.
‘‘It was a horrible tax,’’ Manchin said. ‘‘We all knew it was wrong. We had always tried to change it, but we knew we had budget constraints.’’
The tax equals 5 percent of a vehicle’s value, and has been charged instead of a sales tax on vehicles. But it has created a double-whammy for new residents who had already paid sales taxes on their vehicles.
To avoid paying a tax a second time, untold West Virginians, mostly in border counties, keep their cars and trucks registered in their prior states. County assessors have resorted to photographing license plates in driveways and school parking lots to identify scofflaws.
Berkeley County Assessor Preston Gooden believes the end of the tax will increase county revenues by at least $30 million a year, as residents register their vehicles in-state and put them on the county property rolls.
‘‘My appraisers say it could be more than that,’’ Gooden said Tuesday. ‘‘That was the biggest problem that we had. People were moving in here and they just didn’t have the money to pay that 5 percent tax.’’
Berkeley, the state’s fastest-growing county, counts 67,000 vehicles on its personal property tax rolls that generate $250 million annually, Gooden said. These taxes help fund county services and schools.
The new law will replace the abolished tax with a 5 percent tax on vehicle sales — but will not apply to any vehicle purchased before its owner became a state resident. The new tax will benefit the State Road Fund, which has relied on the privilege tax for 17 percent of its revenues.
It also allows the state tax commissioner to declare a three-month amnesty period some time this year, for residents to pay past-due privilege taxes without penalty. New residents must register their vehicles with the state within 30 days of arriving.