Lawmaker Wants to Double Tax on New Auto Purchases
Posted April 2, 2007
Raleigh, N.C. — When Lisa Camper bought a new, red Ford Fusion in Raleigh Monday, she knew she would also pay a state highway use tax of 3 percent. The suggestion of more than doubling that tax made her see red.
"I think it's ridiculous, because we get taxed at every turn,” Camper said.
A Charlotte lawmaker is proposing to drive up the 3 percent tax on new car purchases to 6.75 percent. Sen. Daniel G. Clodfelter said that would pump some $900 million each year into road construction.
North Carolina has an ever-growing list of highway needs, but paying for them all has legislators stalled. Road projects have suffered because transportation revenues haven’t gone up at the same rate at which the state has grown.
On a new $20,000 car, the current tax runs about $600. Under the Charlotte Democrat's proposal, that amount would jump to $1,350.
The intent of the bill is to bring the tax in line with the state's general sales tax, which is 6.75 percent.
WRAL attempted to reach Clodfelter on Monday, but was unsuccessful. He is the only known supporter of the bill.
"That's probably going to affect sales somewhat,” said Eric Kaplan, the sales manager at Crossroads Ford in Raleigh.
Kaplan said he’s especially troubled by a provision in Senate Bill 1201 that would wipe out the trade-in deductions.
"Now, you only pay taxes on the difference between the one you buy and the one you trade in. If you do away with that, that's significant," he said.
Kaplan said he recognizes the need for more road dollars. He says new car sales haven't been so shiny this year, however, and a new tax would make a far greater dent.
"I don't know if some people, because of that, will decide to go to other places, other states to buy,” he said. “I mean, they could."
Camper, with her new car, said she sees better ways to raise the funds that wouldn’t come out of her pocket.
"If they cracked down on the contractors they hire to do the road improvements, and (encourage them) not to drag their feet, we'd save a bunch of money right there,” Camper said.
The possible tax hike made the purchase of the Fusion look much more attractive to Camper.
“We’d better buy it before they go up in tax,” she said.