When we buy a new or used vehicle, we pay the sales tax on the “bill of sale” amount. When we go to our local town or city hall to register the vehicle, the law requires that we pay the excise tax on the manufacturer’s suggested retail price or original window sticker price.

In last Sunday’s Telegram, new vehicles were advertised for anywhere from $1,000 to $8,000 below MSRP. That’s an extra $192 on $8,000 to register that vehicle. Yet we don’t pay the sales tax on the extra $8,000.

Each year that we re-register the vehicle, though the excise tax rate drops, the rate is still always based on the original MSRP or sticker price.

I just bought a 21-year-old vehicle for $2,200. I paid the sales tax on $2,200, but I had to pay the excise tax on the vehicle’s 1994 MSRP, which was over $20,000. I think that you will all agree that isn’t right.

This can only be corrected by the Legislature. There is a bill in the current session of the Legislature – L.D. 94 – to correct this inequity.

In past attempts to correct this problem, the Maine Municipal Association, a powerful lobby for town and city governments, has lobbied successfully to defeat those bills. They claim that the towns will lose tax revenue and will have to raise taxes.

Of course towns will lose revenue, because they’ve been used to collecting a tax on money that we citizens never spent. Do they have to increase taxes? Not if they reduce spending.

I submit that neither one of these reasons justifies requiring us citizens to pay an excise tax on money that we never spent. If you agree, contact both your local representative and senator and ask that they support L.D. 94.

David Kent

Standish

Copy the Story Link