Oklahoma Senate
Senate to Consider $11 Million Tag Cut for State Motorists, Legislation Prices Annual Tags at $85, $45 and $15
Legislation that will soon be considered by the State Senate would slash the annual tag fees paid by Oklahoma motorists, charging them a flat fee of $15, $45 or $85 depending on the age of their vehicle.
If approved by the full Legislature and the Governor, the measure will also give Oklahoma some of the lowest tag and excise fees in the region -- lower than Texas, Arkansas, Kansas, Missouri and Colorado.
"This will give Oklahomans a much-deserved break on their annual tag fees. No matter what kind of car you own, license plates will be affordable, not a heavy financial burden," said Senator Jim Maddox, author of HB 2663.
Under the provisions of HB 2663, tag fees will be a flat annual rate ranging from $15 to $85, depending on the age of the vehicle. Currently, tag renewals can cost several hundred dollars each year.
"Instead of dipping into their life savings just to buy a license plate, Oklahomans will be able to get a tag at a fair price. This is going to put hundreds of dollars back into the pockets of motorists," said Senator Maddox.
In addition to lowering tag fees, HB 2663 also changes the method for calculating vehicle excise taxes, giving them a break that they do not currently receive. Under the legislation, excise taxes would be calculated on the actual sales price of a vehicle, minus the value of any trade-in. Under current law, Oklahomans get no credit for their trade-in and pay taxes based on the more expensive, sticker price rather than the actual sales price.
"We're replacing an old, broken system with one that makes a lot more sense and is a lot less expensive. It will treat car buyers fairly," said Senator Maddox.
In order to protect services such as education and road construction that currently receive vehicle revenues, HB 2663 also authorizes a slight increase in the vehicle excise tax. The rate would go from 3.25% to 4.5%. Even with the excise tax adjustment, HB 2663 would result in an $11 million
tax cut for Oklahoma motorists.
"I think this is a responsible approach to the car tag problem. It gives motorists the break on tag fees that they deserve without taking money away from schools and road construction in the process. It really is a win-win proposition," said Senator Maddox.
Tag Facts - HB 2663
HB 2663 would provide savings to buyers of both new and used cars, and unlike current law, would allow buyers to deduct the value of any trade-in vehicle from their overall tag and excise tax bill.
Scenario 1:
New vehicle
Sticker Price: $25,000
Actual Sales Price: $22,500
Trade-in Value: $7,500
Scenario 2:
New vehicle
Sticker Price: $25,000
Actual Sales Price: $22,500
Trade-in Value: $0
Scenario 3:
Used Vehicle, Four-years old
Sales Price: $9,000
Trade-in Value: $2,000
Scenario 4:
Used Vehicle, 10-years old
Sales Price: $1,500
Trade-in Value: $0
Oklahoma Tags vs. Surrounding States
Under HB 2663, Oklahoma motorists will pay lower prices for vehicle excise taxes and tags than their counterparts in surrounding states.
Example: $20,600 Vehicle purchase, no trade-in credit.
State Tax & Fees, Year One Year Two Year Five Total 5-year Costs Oklahoma (current law) $995 $252 $189 $1,871 Oklahoma (HB 2663) $1,017 $85 $85 $1,377 Arkansas $1,274 $212 $136 $1,945 Colorado $1,654 $291 $106 $2,475 Kansas $1,657 $368 $261 $2,913 Missouri $1,600 $204 $144 $2,287 Texas* $1,347 $61 $61 $1,598Example: $20,600 Vehicle, $6,180 trade-in credit.
State Tax & Fees, Year One Year Two Year Five Total 5-year Costs Oklahoma (current law) $995 $252 $189 $1,871 Oklahoma (HB 2663) $739 $85 $85 $1,099 Arkansas $989 $184 $136 $1,631 Colorado $1,276 $291 $106 $2,098 Kansas $1,293 $368 $261 $2,548 Missouri $1,202 $204 $144 $1,889 Texas* $970 $61 $61 $1,212* Some Texas counties also charge annual personal property taxes on vehicles. That assessment is not included in the totals above.
