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Friday, March 06, 2020

State Senate passes bill to take trade-in value out of vehicle sales tax


Senate approves vehicle sales tax modification

OKLAHOMA CITY -- The Senate has approved a measure that would modify the calculation of sales tax applied to vehicles.

When a vehicle is purchased under current law, a sales tax of 1.25 percent is levied on the full price of the car. Senate Bill 1619, authored by Sen. Darcy Jech, R-Kingfisher, would modify this calculation so the sales tax would be based on the difference between the actual sales price of a vehicle and the value of a trade-in, if applicable. This tax calculation is used in 38 states.

“Right now, if you buy a $15,000 vehicle, you pay sales tax on that price even if you traded in your car to make the purchase more affordable,” Jech said. “If Senate Bill 1619 is signed into law and you buy a car for $15,000, but trade in your vehicle for a $10,000 credit, you would only have to pay sales tax on the $5,000 you actually paid.”

The average American purchases a new car every six years, and Jech said this measure would make the car buying process more affordable for Oklahoma families.

“We all know the frustration of feeling over-taxed when making a large purchase, and this measure aims to keep more money in the pockets of Oklahomans,” Jech said.

The bill now moves to the House for further consideration, where Rep. Carl Newton, R-Cherokee, will present the measure.

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