Taxman: Car tag hike still will be big

TUPELO – Car-tag costs probably won’t jump by the 45 percent state officials had once predicted, but they’re set to increase nonetheless.
Lee County Tax Collector Leroy Belk estimated the boost at about 20 percent. It takes effect July 1 unless the Legislature tweaks the rate again. But Belk said it doesn’t appear that will happen.
“You know the expression about the fat lady singing,” Belk told the Lee County Board of Supervisors on Monday morning. “Well, she’s on the stage, she’s poised, she’s got the mic in her hand.”
At issue is the state’s discount to people buying and renewing car tags.
Think of it like a coupon: Right now the coupon reduces tag fees by 5.5 percent. The county provides the credit when people purchase their tags, and the state reimburses the county for the difference.
But the state’s reimbursement fund, which is replenished by a vehicle sales tax, started losing money when auto sales plummeted. The state owes counties some $13.3 million in tag credits, Belk said. Lee County alone is owed $392,000.
To offset the deficit, the state was set to lower that discount to 3 percent. But House and Senate members met in conference last week to hash out a new deal and agreed to an increase in the cigarette tax.
With extra revenue from the cigarette tax, the group recommended the credit be raised to 4.25.
If the deal passes the full House and Senate – and if Gov. Haley Barbour signs the bill – that rate will take effect.
“That 4.25 percent will provide some relief – not as bad as the 3 but not as good as the 5.5,” said Tax Commission spokeswoman Kathy Waterbury.
Belk disagreed. He said the new rate will cause financial hardship to residents already struggling in a tough economy. He said the state should keep the credit at its current amount.
“The newer the car, the higher the increase,” he said. “We don’t need anymore tax increases.”
Car tag fees vary depending on the make, model and year of the car, as well as the county’s tax rate. Residents buying car tags aren’t just purchasing vehicle registration, they’re also paying the privilege tax, ad valorem taxes and possibly sales or use taxes.
For example:
- A tag for a 2008 Hyundai Elantra in Lee County costs $159.62 today. If the law goes into effect, it will cost $198.52.
- A 2006 Pontiac G6 in the city of Tupelo will go from $271.26 to $310.51.
- A 2005 Toyota Camry registered in Tupelo will go from $205.87 to $234.59.
Belk said that residents can’t renew their car tags early in an effort to avoid the rate increase. If the tag doesn’t expire until after July, residents must wait, he said. Belk’s office at the Lee County Courthouse issues roughly 4,500 tags a month.
“I know we get blamed for a lot of stuff, but you can’t blame this on us,” said Board of Supervisors President Tommie Lee Ivy. “Blame the Legislature.”

Contact Emily Le Coz at (662) 678-1588 or emily.lecoz@djournal.com.

Emily Le Coz/NEMS Daily Journal