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Archive for Friday, February 11, 2005

House OKs repealing car tax law, giving refunds

February 11, 2005

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— The House approved a bill Thursday to provide $5 million in refunds and repeal a seven-month-old law that critics said forced some consumers to pay inflated sales taxes when they bought used vehicles.

The vote was 119-0.

Last year's law changed how the sales tax is calculated when someone buys a used car, truck or van from another individual. It said if a schedule prepared for county treasurers placed a value on a vehicle that exceeded the sale price, the higher figure was used to determine the tax.

The law was designed to catch tax cheats, but critics said it failed to differentiate between vehicles in mint conditions and junkers. In some cases, values placed on vehicles were double or triple the sale price.

Besides providing refunds, the state would forgo some revenue in the future, an estimated $5.2 million for the fiscal year beginning July 1.

The Senate approved the bill last month, but the House Taxation Committee amended it to require both buyer and seller to sign statements attesting to the vehicle's sale price. Senators must consider those changes and can either approve them or force negotiations over a final, compromise version.

Gov. Kathleen Sebelius has endorsed repealing the law and providing refunds.

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