Arizona Senate OKs changing annual vehicle license tax rules

By Greg Hahne
Howard Fischer/Capitol Media Services
Published: Friday, March 11, 2022 - 1:00pm
Updated: Saturday, March 12, 2022 - 7:33am

The Arizona Senate unanimously gave preliminary approval on a measure to change the formula used to determine the annual vehicle license tax.

Instead of the current mode of basing the tax on 60% of the manufacturers suggested retail price, known as MSRP, the bill would require Arizona Department of Transportation to calculate the tax based on what people actually paid for their vehicle, as that can be lower. 

But in January, an Edmunds report found that 82% of new vehicle purchases were above the suggested retail price. Sen. Michelle Ugenti-Rita added an amendment to allow the tax to be based on MSRP if it is lower.

“This makes it either/or which protects in a situation like right now where there's more instances of people paying more, above MSRP. But that's not the norm," Ugenti-Rita said. 

The bill will need full Senate approval before going to the House.