Counties’ Leased Vehicles Tax Exempt Beginning Oct. 1

A number of laws passed last session come into effect on October 1. One such law is a Motor Vehicle Administration (MVA) bill, Senate Bill 34, which in part exempts vehicles leased by counties from the state excise tax.

Under existing law today, counties do not pay excise tax on vehicles they own – but the law does not explicitly exempt county leased vehicles from the excise tax.  MVA currently titles vehicles leased by counties in the particular county’s name, preventing its subjection to the excise tax, according to Senate Bill 34’s fiscal note. MVA lists the lessor as a lienholder, rather than the title holder.

Because of this, the new law probably does not save any counties any money – at least not right away. The bill’s passage, however, ensures that future administrations cannot change this practice and begin subjecting leased county vehicles to the excise tax – good news for counties with leased vehicles. It also allows MVA better flexibility in how they title the vehicles, without negatively impacting counties’ bottom lines.