Vehicle Property Taxes

Vehicle property tax is a tax charged by some state and local governments on owned vehicles, typically based on the vehicle’s value.

This tax is usually paid annually, although the timing and calculation methods can vary by jurisdiction. Not all states apply a vehicle property tax, so requirements depend on local regulations.

In Fixed and Variable Rate (FAVR) programs, vehicle property tax is included as part of the fixed reimbursement component in regions where it applies. This helps ensure that reimbursements reflect the full cost of owning a vehicle in a specific location.

Including vehicle property tax in mileage reimbursement calculations supports more accurate, location-based payments and helps keep reimbursements aligned with real-world driving expenses.