State Looking to Increase Used Car Tax Revenue

If passed, House Bill 340, now in the Senate Finance Committee, could increase the tax paid on used cars and reduce taxes on leased vehicles. Bill supporters want the 7% tax charged on a used car based on either the sales price or the state’s book value, whichever is higher. The change would put used car purchase tax on the same basis as new cars instead of at the state’s book value which is usually lower than the purchase price. Estimates show the change could mean an extra $237 million in Title Fee Ad Valorem Tax payments by fiscal 2019.