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Senate Approves $11 Million Tag Cut for Oklahoma Motorists, Legislation Prices Annual Tags at $85, $45 and $15

Legislation approved by the State Senate Monday would slash the annual tag fees paid by Oklahoma motorists, charging them a flat fee of $15, $45 or $85 depending on the age of their vehicle. If approved by the full Legislature and the Governor, the measure will also give Oklahoma some of the lowest tag and excise fees in the region --lower than Texas, Arkansas, Kansas, Missouri and Colorado.

HB 2663 by Senator Jim Maddox passed the State Senate on a 37-11 vote. It now goes to conference committee where final details will be ironed out.

"This is the kind of tag relief that Oklahomans deserve. It will give us some of the lowest vehicle fees in the region," said Senator Jim Maddox, author of HB 2663.

Under the provisions of HB 2663, tag fees will be a flat annual rate ranging from $15 to $85, depending on the age of the vehicle. Currently, tag renewals can cost several hundred dollars each year.

"When tag buying time rolls around each year, Oklahomans won't have to take out a loan just to buy their license plate. They'll get a tag at a reasonable price and will be able to spend the savings on something a little more worthwhile," said Senator Maddox.

In addition to lowering tag fees, HB 2663 also changes the method for calculating vehicle excise taxes, giving them a break they do not currently receive.

Under the legislation, excise taxes would be calculated on the actual sales price of a vehicle minus the value of any trade-in. Under current law, Oklahomans get no credit for their trade-in and pay taxes based on the sticker price, even though it is generally higher than the actual sales price.

"The old system doesn't make much sense. We're trying to replace it with something that treats car buyers fairly," said Senator Maddox.

In order to protect services such as education and road construction that receive vehicle revenues, HB 2663 also authorizes a slight increase in the vehicle excise tax. The rate would go from 3.25% to 4.5%.

Even with the excise tax adjustment, HB 2663 would result in an $11 million tax cut for Oklahoma motorists.

"We're trying to solve the tag dilemma in a responsible manner. Instead of just cutting fees without regard to the impact it might have on important services, we're trying to soften the blow so things like education and road construction don't take it on the chin in the process. Unlike some of the other proposals, this legislation protects our public school and transportation budgets, but gives motorists a break at the same time," said Senator Maddox.

Tag Facts - HB 2663

HB 2663 would provide savings to buyers of both new and used cars, and
unlike current law, would allow buyers to deduct the value of any trade-in
vehicle from their overall tag and excise tax bill.

Scenario 1:
New vehicle
Sticker Price: $25,000
Actual Sales Price: $22,500
Trade-in Value: $7,500

Current Law HB 2663 Tax & Tag (year one) $1,134 $760 Tag (year two) $291 $85 Tag (year six) $196 $45 TOTAL (year 1-6) $2,338 $1,145

Scenario 2:
Used Vehicle, Four-years old
Sales Price: $9,000
Trade-in Value: $2,000

Current Law HB 2663 Tax & Tag (year one) $315 $355 Tag (year two) $140 $45 Tag (year six) $97 $45 TOTAL (year 1-6) $903 $580

Under HB 2663, Oklahoma motorists will pay lower prices for vehicle excise taxes and tags than their counterparts in surrounding states.

Example: $20,600 Vehicle, $6,180 trade-in credit.

State Tax & Fees, Year One Year Two Year Five Total 5-year Costs Oklahoma (current law) $995 $252 $189 $1,871 Oklahoma (HB 2663) $739 $85 $85 $1,099 Arkansas $989 $184 $136 $1,631 Colorado $1,276 $291 $106 $2,098 Kansas $1,293 $368 $261 $2,548 Missouri $1,202 $204 $144 $1,889 Texas* $970 $61 $61 $1,212

* Some Texas counties also charge annual personal property taxes on vehicles. That assessment is not included in the totals above.


Contact info
Senate Communications Division - (405) 521-5605