Representative Steve Bashore
Last year, an elderly voter contacted me, frustrated with the taxes she had to pay when buying a car.
When a person buys a vehicle in Oklahoma, they pay tax on the full cost of the car, but they get no credit for the value of a trade-in. This amounts to double taxation. The person paid a significant amount of tax on the trade-in vehicle when buying it, but they get no credit when they trade it in. In addition, when the exchanged car is resold, the State taxes it again. An illustration of this would be a person buying a used vehicle for $21,500. Motor vehicle excise tax in Oklahoma would be $670, regardless of the value of a trade-in. Now let’s say the person trades in a car worth $20,000. In this case, the tax amounts to almost half of the $1,500 increase in the value of the purchased car.
In neighboring states, such as Texas, Kansas, Missouri, and Arkansas, the trade-in value of a vehicle reduces the assessed value of the purchase, saving taxpayers money.
For my constituent – a woman on a fixed income who needs reliable transportation to support her family’s health care needs – this double taxation was not trivial.
People also read…
It is high time Oklahoma lawmakers addressed this issue and put Oklahoma taxpayers first. We should work hard to ensure that we are not an exception in tax policy. In fact, we should be leaders.
Taxes are necessary, but their impact on economic activity must be minimized. Our current vehicle tax structure discourages people from trading in cars or buying a more expensive car. A natural consequence of this would be a shortage of used cars, as fewer trade-ins are available.
Plus, double taxation just isn’t fair, and it’s a cycle that hurts all Oklahomans.
Thanks to my constituent, we are working to fix this problem.
I introduced House Bill 2986, which was passed last week by the Oklahoma House of Representatives by a unanimous 92-0 vote. The bill now awaits consideration by the state Senate. This bill will reduce taxes on the purchase of a vehicle based on the value of a trade-in.
Because someone saw something wrong and brought it to the attention of their state representative, we hope we can help families across the state while making Oklahoma’s tax policies more competitive. with surrounding states.
It is the epitome of engaging with government to effect positive change not just for yourself, but for many. Government institutions can seem intimidating, but I’m glad my citizen didn’t let that stop her from reaching out.
HB 2986 is just one bill in a larger package of measures aimed at providing tax relief to the hard-working citizens of our state. At a time when inflation is at its highest level in 40 years, it is important that we do everything we can to minimize the tax burden for all Oklahomans.
Rep. Steve Bashore, R-Miami, has represented District 7 since 2020.