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Archive for Tuesday, March 7, 1995

CAR-TAX CUT COULD FUEL SALES OF NEW MODELS

March 7, 1995

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Many drivers will trade in their clunkers for newer cars if the Kansas Legislature lowers vehicle taxes, car dealers say.

If you've noticed an unusually high number of older cars on Kansas roads, don't be surprised.

A study done for Kansas Inc. by the Wichita State University business school found Kansas has one of the oldest fleets of cars in the nation, in terms of vehicles that are at least 10 years old.

And the study found it's mostly because of high vehicle taxes on newer models, says Don McNeely, executive vice president of the Kansas Automobile Dealers Assn.

McNeely, who represents the state's new car dealerships, said the WSU study found the counties in Kansas with the highest property taxes also have the oldest vehicles.

The study stated that by reducing property taxes, there might not be any more new cars sold, but drivers would at least trade up to newer vehicles, McNeely said.

McNeely, who is supporting efforts in the Kansas Legislature to reduce vehicle taxes this year, said high taxes have encouraged people to hold onto their older cars longer.

Douglas County Treasurer Nancy Hempen said vehicle taxes in the county on a 1995 Ford Taurus would be about $468, plus a $7 title fee, $27.25 registration fee and a 50-cent reflector fee.

That compares to a tax of $155.86, plus title and registration fees, on a 1990 Ford Taurus, she said.

Hempen predicted the Legislature would approve a vehicle tax-cut bill this year.

The House approved a bill today on a 68-54 vote that would reduce the property tax assessment rate for motor vehicles from the present 30 percent of fair market value to 15 percent by the year 2000.

The bill would also eliminate the imposition of the state's 36.5-mill levy, used to raise money for public schools and building projects, on motor vehicle taxes over two years.

It also would place a cap on the average county mill levy, as of November 1994, for car-tax purposes.

The League of Kansas Municipalities said it could cost local governments as much as $148 million in lost revenue over that five-year period, even with economic growth.

Gary Bennett, general manager of Laird Noller Motors, 23rd and Alabama, said the issue of property taxes comes up most often when people want to lease cars because that has to be figured into the cost.

Larry Walburn, general sales manager at Jim Clark Motors, and Bennett both predicted lowering property taxes would mean new car sales would see a boom.

"By the time you get through paying the sales tax and go down and pay your property tax, a lot of people may hesitate and be inclined to buy a used car," Walburn said.

Walburn and McNeely said lowering taxes will also indirectly affect the environment.

"You're getting cleaner, more efficient vehicles on the highway than you have right now," Walburn said.

"It's going to enable people to drive safer, more fuel-efficient vehicles," McNeely said.

  • On the Road Warriors: Have any questions/concerns/peeves related to streets or traffic? Call the J-W Access line at 865-5000, enter category 7485 and leave a brief message.

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