Posted on 03/14/2009 6:08:55 AM PDT by TnGOP
Officials say taxpayers could find themselves with a major case of sticker shock when renewing car tags later this year if the state legislature fails to take action to replenish the state's tag credit fund.
Alcorn County Tax Collector Greg Younger said the economic downturn has caused a shortfall in the fund created in 1994 to reduce the cost of car tags in the state and counties are already feeling the pinch. During the 1994 legislative session, state lawmakers passed the Motor Vehicle Ad Valorem Tax Reduction Act which went into effect in January of 1995. The legislation raised the sales tax on automobiles from 3 percent to 5 percent and placed the money into a fund which is used to offset the cost of tags and tag renewals to taxpayers by providing a "legislative tag credit". Taxing authorities, such as counties, cities and school districts, give the credit to the taxpayer when the tag is purchased and are then reimbursed from the fund.
Younger said with fewer people buying cars the amount of money being produced by the sales tax on automobiles and going into the fund as fallen off dramatically, creating a major deficit in the fund.
In January, Alcorn County received $18,000 less in reimbursement funds than it was owed. For the month of February, the county's reimbursement from the state was $74,737 less than what was owed.
"That effects everybody. It's less going to the county, to the schools, to cities and municipalities," said Younger. The tax collector said they are required by law to provide the credit through July 1, whether they are reimbursed fully or not. After July 1, if the legislature doesn't take steps to put additional money into the fund the tag credit could go away causing a major jump in the cost of tags and renewals.
As an example, Younger said the tag on a new vehicle valued at $36,000 would now be around $660. Without the legislative tag credit, that same tag would cost $1,195.
He said he's very concerned about the impact this type of jump would have on people already struggling to pay their bills in the current economic circumstances. Younger said he hopes the legislature will find a way to correct the problem before the tag credit is lost and encourages people to talk to their senators and representatives about making sure the issue is dealt with during the current legislative session.
Mississippi, my home state, has always had extremely high prices for tags. The legislation passed in 1994 helped tremendously, but now funds are drying up.
Incidently, my Mom's car tag for her 1973 Buick Century Luxus is Zero. She has an antique car tag.
By the way, today is Mom's birthday. She is 85 today, and still going strong!!!! She still drives the old Buick, but nobody will ride with her!
Heh. :)
Where I am in Tennessee, we don't have the inspection, but I'm sure they're thinking about it.
You'd think that occasionally legislators would think about doing more with less instead of how to squeeze a little more from everyone. I guess it never crosses their mind.
I wonder how long before other states decide that your TV is a cash cow too and should be subject to yearly tax.
$1100 for a tag? What? Are they nuts?
A good reason to keep your old car in good condition.
Fear not. Carbon taxes will take care of that.
I think my Dads last Mississippi car tag was about $600.00. That was on a 2 year old Park Avenue. Where Mississippi bases the tag price on value, Tennessee has a flat state fee, and the counties add their fees, which differ from county to county. Mine last year was $87. Some are as low as around $50. That’s more like it.
It's the frog in the warm water scenario.
the scams are spreading...MN is trying to bring it back,too
despite this:
**Emissions Control has Little Impact on Climate***
http://www.freerepublic.com/focus/f-news/2172677/posts
My mom will be 85 this year too. Still driving, still polkaing, still the same God-fearing conservative she always was. God bless them both.
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