Friday, February 3, 2012
The Case For HB133: The 6-Month Car Registration Option
Last year I had a constituent contact me about car registration practices. His concern was that vehicle registrations were tied to date of expiration, not the date of the new registration. For example, if he registered his car in July of 2010 it would expire in July 2011. However, if he waited and registered again in September, his new registration would expire in July 2012 not September.
His recommendation was to allow for real 12 month registrations regardless of the expiration date. This issue afforded me the opportunity to learn a lot about why the state does things the way it does today.
One of the eye opening things I discovered was that registration fees are not just a "fee" like the one you pay when you go to a State Park or get a marriage license. The fee we pay when registering a vehicle is actually a fee we pay in lieu of property tax on our vehicles. This explains why the dates of expiration aren't changed despite lag time in renewal. The fee is a means to collect property-type tax on vehicles. Many years ago, the state used to assess property taxes on each vehicle. However, this process was cumbersome and awkward to collect as most owners in the state delayed payment into the last days of December. The workload for the State was difficult to manage logistically under this past scenario.
Then, the State adopted the current method of age-based assessments for cars and light trucks. This current fee structure is called a fee-in-lieu.
Despite this new information, it still seemed that the State could offer some flexibility to meet the needs of the public when dealing with registration of their cars. So, I put my head together with the Tax Commission and began to look at some different registration options.
What we came up with was a 6-month registration option for owners in HB133. The registration fee would be discounted to about 60% of the yearly amount.
Why would owners want a 6-month registration? Here are come compelling reasons:
1. Cars to Be Sold - When a car is sold, the state does not refund the registration fee for the difference between when they sell the car and when their registration expires. Hence, owners that may know they are going to sell their car may choose a shorter registration. It makes economic sense to do so.
2. Seasonal Vehicles - Some folks own multiple vehicles which are seasonal in nature. Motorcycles, Rugged Utility Vehicles, Sports Cars, and other vehicles may prefer to use a shorter term registration since they receive less use during Winter months.
3. Social Economic Considerations - Many folks who are in poverty or living month-to-month are often disadvantaged when needing to pay the full year registration. This 6-month option provides a means for them to pay a less amount. Although the repeated use of the shorter term registration will cost more to them in the long run, it does allow for short term relief if needed.
In all, this bill should provide more options to the public while keeping tax revenue nearly neutral at the state and county level.