Excise Tax's dirty little secret and what Sen. Diamond is doing to change it. - By Sen. Bill Diamond

Purchasing a car is a big investment. It’s often one that evokes mixed emotions-- from frustration during the sales dickering to the joy of driving off the lot in a new vehicle. But perhaps, the most disheartening moment comes when 10-days later you go to pay your excise tax. While taxes are inevitable--and necessary to keeping our local and state governments functioning, excise tax seems to one of the least-liked taxes. 
 

Why? Because under its current structure, it’s inherently unfair. Unlike sales tax or even property tax, the excise tax is a tax where you are taxed--not on the actual purchase price (or what you paid for it)--but rather on the suggested price. When you shop at Reny’s, you don’t pay sales tax on the “suggested retail price” you pay on the actual purchase price--even if it’s a blowout sale! 

Back when I was Secretary of State, I worked hard along with others to make this law more fair by changing this system. Unfortunately, our efforts were thwarted. 

Since then nothing has changed. Now today, I’m back at it. Recently, the Taxation Committee asked me to be involved in their special subcommittee to review current legislation and make a recommendation on how to proceed. LD 94 is one such measure I’ll be reviewing. 

As written, LD 94, “An Act To Base the Excise Tax Imposed on the Purchase of a Motor Vehicle on the Price Paid” is a good starting point. As drafted, it requires the excise tax on motor vehicles and camper trailers to be based on the purchase price of the motor vehicle or camper trailer. For used motor vehicles and camper trailers, if the initial bill of sale or state sales tax document is not available, the excise tax is based on the maker's list price. 

Currently, commercial vehicles are exempt from this unfair system--and the Highway Fund pays the towns for the loss in revenue.

While I’m not sure where we will land on this bill, I can say that the current law should be changed to be more fair and equitable to the public. 

I think we agree that when our excise tax dollars go toward local road maintenance, construction and repair, that our communities are better off. However, let’s work to make it more fair--and based on what we actually pay versus what they wanted us to pay. 

If you want to stay up to date on this matter, I would urge you to subscribe to my e-newsletter. You can do so by going to http://ow.ly/Muyg6

As always, if you have any questions about this bill or anything else going on in Augusta, please feel free to contact me at diamondhollyd@aol.com or (207) 287-1515.