A Review of the Department of Revenue's Vehicle Assessment Guides
May 2000

REPORT (PDF)     SUMMARY (PDF)

Members of the General Assembly requested a review of the Department of Revenue’s (DOR’s) role in administration of vehicle personal property taxes. The requesters asked us to focus on the vehicle values DOR supplied to the counties in the fall of 1999.

We found that the vehicle assessment guides published by DOR in October 1999 contained a significant number of incorrect values, most of which resulted in an individual’s property tax bill being higher than it should have been. We estimate that a minimum of 9,184 (38%) values out of 24,459 in the October assessment guides were incorrect. In April 2000 DOR estimated that more than 300,000 taxpayers may have had incorrect bills. 

The problems with the vehicle assessment guides produced by DOR had several causes:

• Entering data for the guides is a labor-intensive, manual process.
• The computer database for the assessment guides has limited checks.
• DOR did not verify the data in the guides.
• The assessment process was self-contained; a single DOR employee was charged with producing the guides.
• Management did not properly supervise the production of the assessment guides.
• DOR did not provide good customer service to counties that inquired about problems.
• There are no written policies and procedures for producing the assessment guides.

We also identified other problems with the vehicle assessment guides. DOR has not used a consistent methodology to determine values for new cars and medium and heavy trucks. This results in taxpayers being treated differently. Also, DOR should consider deleting many of the heavy trucks from the guides because these trucks are now taxed under statutory provisions for motor carriers and are no longer subject to personal property tax at the county level.

When DOR management learned the extent of the problems with the guides in February 2000, the agency responded by taking several steps to correct the problems. DOR management acknowledged responsibility for the problems. The director offered the assistance of DOR employees and reimbursements ($1 per refund check) to the counties. After an internal audit, four DOR employees were disciplined. DOR made efforts to improve service to the counties and established a team to review the system.

DOR’s vehicle valuation team reviewed the system for producing the guides and recommended changes to lessen the risk of errors. DOR should implement its short-term plan to improve the quality and accuracy of the guides. DOR should also consider long-term solutions that increase the use of automation.