Source: Report on Oklahoma's Motor Vehicle Tax Structure, Oklahoma Tax Commission, March 9, 1998.
Oklahomans also pay an annual registration fee, in the amount of 1.25% of the factory delivered price. This fee is reduced by 10% for each year of the vehicle's age. Approximately $20 is added to this fee ($15 for a road user fee and $5 for miscellaneous fees). In FY 98, the average annual registration fee was approximately $110.
In most other states, the annual vehicle registration fee is less than the fee in Oklahoma, but property taxes are also required to be paid on motor vehicles. These differences have resulted in a perception that Oklahoma's motor vehicle taxes are very high compared to those of other states, although a 1998 study by the Oklahoma Tax Commission showed that this perception may not be accurate.
Oklahoma allows trucks and station wagons (including sport utility vehicles and mini-vans) to be tagged as commercial vehicles if they are used primarily for commercial purposes. The commercial vehicle fee for vehicles under 15,000 pounds is $95. It is widely believed that many people are evading payment of noncommercial vehicle registration fees in Oklahoma by obtaining commercial tags, tribal tags, out-of-state tags and dealer tags.
Changed registration fees to:
Prior to Governor Keating's veto of HB 1734, the Legislature passed a companion bill, SB 322 by Senator Angela Monson and Representative Gary Taylor. This bill, which was also vetoed, would have amended HB 1734. In HB 1734, the basis for the vehicle excise tax was specified to be the actual sales price of the vehicle less any credits, discounts or allowances for a motor vehicle traded in as part of the transaction. SB 322 would have also allowed the subtraction of a vehicle sold by the taxpayer within 30 days prior to or after the date of purchase of the vehicle upon which the excise tax was levied. The provisions of HB 1734 requiring the values of both the purchased vehicle and the traded-in vehicle to be within 20% of the average retail price as listed in OTC-approved automotive reference material would also have applied to the value of vehicles sold by the taxpayer within the 30-day time limit.
According to the Oklahoma Tax Commission, the effect of these measures would have been to increased vehicle excise tax collections by approximately $126 million, and reduce registration fees by approximately the same amount. Whether an individual taxpayer would have paid more or less under the provisions of these measures depends upon the circumstances of the transaction and upon the length of time the vehicle was kept by the owner. All vehicle registration fees would have been lower, but some excise tax amounts would have increased, particularly for used vehicles. Examples prepared by legislative staff and reviewed by the Tax Commission for the purpose of illustrating the effects of these measures indicate that virtually all taxpayers would have realized a tax savings under these measures by the fourth year of ownership.
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