H.B. 115 Motor Vehicle Sales Tax Amendments: transcript

Thank you, Mr. Chairman, members of the committee. It's a pleasure to be before you this morning. Um, I don't know how many of you have ever been asked, why do I have to pay sales tax on something multiple times? Um, this is something that's been brought to me time and time again by folks, and as I looked at it, I, I originally started with eliminating sales tax on used vehicles and realized that the, uh, fiscal note on that would be somewhere in the neighborhood of four to $600 million. Um, so I realized that that was something too big to try to tackle in one year. Um, so I started looking back and, and as you'll look at the fiscal note on this bill, um, it's still 30, $32 million of ongoing expenses. So it's a huge nut, uh, to try to tackle, especially this year. So I understand the concern with that. But, but from a policy decision, I would like us to start to think about why do we charge sales tax multiple times on a single commodity? Um, and, and as we look at, as vehicles get older, as people start to get to the point where these vehicles are getting cheaper, they're going to folks that, that maybe could use the, any help that they can get. I think at some point we ought to draw a line in the sand. And I'm thinking that, uh, that this year I'd like to try to do an amendment. Oh, I'm speaking to the First Amendment, which clarifies that the vehicles we're talking about are less than 14,000 pounds, not less than 12,000 pounds. Um, but the bill I have presented before you today, um, would exempt any vehicle older than 10 years old, uh, to being, it would make it exempt from collecting sales tax at the time of transfer. So that's the bill, uh, before you today. And then that concludes my presentation.

I just have a comment if I could, I appreciate you bringing this bill. I think it's interesting. Last year we had a bill in front of this committee talking about the, the fact that a lot of people register their vehicles in other states because it's more competitive in other states and in a state to the north of us in Montana, they, they do permanent registrations for older vehicles. So I think that, I, I agree with you. I think we should Brett draw a line in the sand if you've paid sales tax on something, if you don't pay that sales tax over and over and over again. So, but I, I know the fiscal note is high, um, but I think it's a good policy. I appreciate you bringing it. Thank You.

Representative Monson, uh, I, Uh, echo those sentiments that, uh, representative Vernal just said, but because it is a big fiscal note, what would it look like, say 15 years just to maybe, you know, who knows if this gets funded, but I was just kinda curious what that number would look like.

Um, it cuts it in just a little bit more than half. Um, so I'm actually having an amendment being drafted to move it to 15 if it comes outta committee. If it doesn't, then I understand. So. Gotcha.

Okay. I, I agree that, I know it's a huge elephant to tackle this year, but I think it's a, a policy that we ought to start going down and even if every year we just dial it back a year, so it's a smaller bite to take, I think it would make good sense for, especially for our college students who could use any help they can get, uh, you know, this would help people that need the help. And so, just one follow up. So that would include the initial purchase price. So let's say you bought it in the case of 15 years. You purchase a used car 15 years, nothing at that time, right? This is Okay. Perfect. Thank you.

Yes, since we're not there yet? Thanks.

Oh, my mic is still on. Um, I would like to make an amendment, but I don't have, anyway, I first, I'm looking for the line.

Like to, I'd like to move the first Amendment.

To the sponsor. To the sponsor. I'll waive.

I, I'd like to move a verbal amendment on line 8 65 and then 10 years to 15.

I appreciate it. Okay. All right. Okay. To the sponsor. I think that's a friendly amendment. I think that'll significantly reduce the, the, uh, fiscal note, which gets us going down a path, which I think is good policy. Okay. Thank you.

Yeah, I, I oppose the motion. I, you know, there are a lot of things that we get taxed on every year. For example, property tax, that's every year. Um, and I think this just targets one area of the one small area. I would prefer to say let's cut a percentage of tax, uh, or of the, yeah. Of the tax that all of these vehicles, maybe as a percentage, but I, I don't really like the policy in general, so I'll be a no thanks.

So, well, Maybe I could just explain. I love tax cuts in general. I like 'em to be more broad. This is just cutting out a small portion. Okay. Fair enough. Fair enough. Okay.

Yes. On

I will then make a motion that we favorably recommend House Bill one 15 as amended.

I would. Just for a second. I think it's excellent policy. I agree. This is, you know, it may not get funded, therefore, but it is a good conversation starter. 'cause we do need to get to the point where you truly never own it. Right? You're always renting it from the government. And, uh, and that's how I always have felt about, you know, uh, tax on a car. And so, I, I do favor this policy actually. It's great policy.

I would, I would just say in some of the comments that were made, I, property tax is the only other thing that I can think of to say that there are several things I would just disagree. I think property tax is one of those things that we continually pay, but I can't think of any other commodity that we buy that we, every time it trades hands, we pay sales tax on it again and again and again. Sometimes 10 times you pay sales tax on the same item. And I think that we need to fundamentally look at that. I thank you for your support.

Madam Reading Clerk Per nope. House Bill one 15 Motor Vehicle Sales Tax Amendments by representative Tom Peterson. This bill was earned in revenue and taxation with the vote of 9 1 1 Representatives.

Here we go. Thank You Mr. Speaker. Uh, HB one 15 is one of the things that I've, from my constituents, uh, has I've heard the most complaints about. Um, and, and as I look researched, what items we pay sales tax on multiple times. This was one of the only ones that I could find. And, um, so as I, I looked at, at how I could help with this, uh, many of you may know that, uh, anytime you, uh, buy or sell a vehicle, a lot of times there's discussions about what number to fill into that category on the bill of sale. Um, and it's my belief and a lot of my constituents belief that, that we should pay sales tax on an item once. And so what this bill does is it says a vehicle that is under the weight of 14,000 pounds that is, um, sold is exempt from, uh, sales tax. If it's over 15 years old, um, I would've liked to have gone to any used vehicle, but that fiscal note was somewhere in the neighborhood of a billion dollars. So I knew I wasn't gonna get that passed. Uh, this has a much less significant fiscal note, but still very significant for this year. So I think if nothing else, I think we need to start having the, the discussion about, uh, repeatedly charging sales tax on one specific item. With that, I'll yield any questions.

I I think this is a good direction to head and I would like your support and, uh, I hope to whittle away at this one year at a time. Thank you.

Representative Christofferson leadership, Schneider all present, having voted voting is now closed first.