Buckingham, PE Rank Among 10 Lowest Tax Burdens In Virginia
Published 4:46 pm Thursday, June 4, 2015
According to a new study by SmartAsset, Buckingham and Prince Edward counties are among the 10 localities with the lowest tax burdens in Virginia.
Prince Edward has the eighth lowest tax burden in the state, while Buckingham follows in ninth place, according to the financial company, which uses data to offer advice on questions dealing with personal finance.
“Where you live can have a big impact on both [the] types of taxes you have to pay each year and how much money you spend on them,” the firm’s website explains. “SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country and ranked the lowest to highest tax burden.”
To better compare income tax burdens across counties, SmartAsset used the national median household income, applying relevant deductions and exemptions before calculating federal, state and local income taxes.
According to the firm, using the national median household income of $53,000, the average annual amount of income taxes a person would pay in Prince Edward and Buckingham is $10,133, which is also the Virginia average.
“These numbers are not going to be exact for any one family,” said SmartAsset Managing Editor A.J. Smith, adding that in determining the sales tax burden, the firm estimated that 35 percent of take-home, or after-tax, pay is spent on taxable goods.
In both counties, a person annually pays an average of $832 in sales taxes. The state’s average is $852.
“We multiplied the average sales tax rate for a county by the household income less income tax,” says the firm’s website. “This product is then multiplied by 35 percent to estimate the sales tax paid.”
The firm divided each county’s median property tax paid by median property value to determine the median property tax rate by county, and applied the determined rate to a hypothetical $250,000 property in each county to calculate a representative property tax paid.
Using that criteria, the average annual property taxes a person pays is $1,188 in Prince Edward and $1,248 in Buckingham, SmartAsset’s study states. The average across Virginia is $1,730, according to the study.
For fuel taxes, the firm first distributed statewide vehicle miles traveled down to the county level using the number of vehicles in each county. “We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax,” the study said.
In Prince Edward, the average person pays $168 in fuel taxes annually, while the average in Buckingham is $147. The statewide average is $211.
To rank the counties, the firm added the dollar amount for income, sales, property and fuel taxes. “For each of the more than 3,300 counties in the nation, we determined the tax burden [for] a person who makes the national median household income with a $250,000 house who spends 35 percent of take-home pay on taxable goods and drives a weighted number of miles per year,” the website states.
With 100 representing the county in the United States that has the absolute least amount of tax burden, Prince Edward scored 68.66, while Buckingham’s index is 68.29, according to the study.
“We looked at the tax burden all across the country … and then sort of graded on a curve, basically,” Smith said.
In Prince Edward, landowners pay 49 cents per $100 of assessed value, and the county’s personal property tax is $4.50. Buckingham landowners pay 50 cents per $100 of assessed value, and $4.05 for personal property.
“It’s not going to be exactly what you would pay if you moved to the county,” Smith said, “but it allows you to look at how it compares to other counties across the country so you can make an informed decision before you move somewhere or before you take a job somewhere else.”
Cumberland County did not rank in the top 10 of the survey.