Committee advances bill to stop repeated sales taxes on older used vehicles, amends exemption to 15 years

The House Revenue and Taxation Standing Committee voted to recommend House Bill 115, a measure that would exempt certain older vehicles from sales tax collection at the time of transfer. The sponsor said the bill aims to prevent multiple sales taxes on the same vehicle over its life and help lower-income buyers and students who rely on older cars.

Representative Peterson, the sponsor, described an initial approach to exempting used vehicles and said removing sales tax on all used vehicles produced an estimated fiscal cost of "somewhere in the neighborhood of" $400 million to $600 million, an amount the sponsor said was too large to tackle in a single year. The version presented to the committee initially proposed exempting vehicles older than 10 years; the fiscal note on that version was stated in testimony as approximately $3,032,000,000 of ongoing expenses (sponsor comment in committee record).

Committee members proposed incremental changes. Representative Cofer and others suggested aligning treatment with neighboring states and permanent registrations for older vehicles. Representative Lisonbee asked about a 15-year cutoff; the sponsor said changing the exemption to 15 years would reduce the fiscal impact by more than half and described that change as a friendly amendment.

The committee adopted a technical amendment (amendment number 1) and then a verbal amendment changing the exemption from 10 years to 15 years. Representative Lisonbee moved to favorably recommend HB115 as amended. The sponsor summarized that, unlike property taxes, sales tax can be assessed repeatedly when a commodity trades hands many times, and the sponsor urged the committee to begin reducing repeated sales taxation. The committee approved the amended bill by voice vote; the chair noted one recorded "no" and ruled the motion passed with a favorable recommendation.

The bill will proceed to the House calendar as recommended by the committee. Lawmakers emphasized that the amendment approach is intended to reduce fiscal impact gradually rather than enact a full elimination of sales tax on used vehicles in a single year.