OKLAHOMA CITY — Consumers could pay less for vehicles under two bills filed by state lawmakers.
Sens. Kim David, R-Porter, and Julie Daniels, R-Bartlesville, have filed separate bills to repeal a 1.25 percent sales tax on new and used vehicles.
Lawmakers in 2017 passed House Bill 2433, which added the 1.25 percent sales tax on top of the 3.25 percent excise tax on vehicle sales.
Gov. Mary Fallin signed the measure, which took effect July 1, 2017.
After a legal challenge was raised, the Oklahoma Supreme Court ruled in August 2017 that the measure was not a tax increase because it removed an exemption. Tax increases require supermajority support in both legislative chambers.
David is the author of Senate Bill 2, which would remove the 1.25 percent sales tax.
David said the state was in a financial crunch when the measure was passed in 2017. She said several groups have sought exemptions.
“It is a pretty regressive tax on people who need a vehicle to get to work,” she said. “We need to revisit the 1.25 percent sales tax.”
She said she has gotten a lot of complaints about the sales tax.
Daniels’ Senate Bill 6 also would repeal the tax.
She said because the state already imposes an excise tax on vehicles, she thought adding a sales tax was a “double tax.”
“Vehicles are an expensive purchase for most Oklahomans,” Daniels said.
The tax makes the car purchase more expensive as well as the car payment, she said.
Lawmakers also recently obtained the supermajority of votes needed to increase the cost of diesel by 6 cents a gallon and gasoline by 3 cents, she said.
“It seems to me it is even a greater burden to ask the taxpayers to absorb,” Daniels said.
She said the additional tax on vehicles brought in about $130.8 million during the fiscal year.
“We have just managed to emerge from a very prolonged and serious budget crisis where we had to use a number of measures to keep the state barely afloat,” said David Blatt, Oklahoma Policy Institute executive director. “It seems premature to already be coming back and talking about reversing some of those revenue measures.”
Blatt said there will be debate about such policies and whether or not the tax has had a harmful effect.
“We think that protecting the revenue base and not immediately going back down the tax cut road would be the more sensible approach,” Blatt said.