Does Utah law penalize motorhome owners? Is your state next?

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Utah penalize some motorhome owners
Motorhome images: rvtrader.com

By Russ and Tiña De Maris
Some Utah motorhome owners have been priced off the road. How? A law that came into effect last year has changed how Utah motorhome owners are billed for their motorhome registration. Does Utah penalize motorhome owners? Some feel they are being penalized. And while it may seem a “local issue,” what happens if your state takes the same approach?

Smelling a rat

In the past, Utahans saw their registration fees based on the value of the motorhome. But a wide-eyed Utah senator, Curt Bramble, penned and got passed Senate Bill 169. Bramble’s brainchild, by its description, enacted “an age-based uniform statewide fee for motorhomes.” Sounds pretty innocuous on the surface. After all, if it’s uniform, it must be easier to understand and deal with, right? Bramble says he consulted with the Utah RV Dealers Association. He says the association did all his research used in preparing the bill.

Right there, some might begin to smell a rat. Just whose interests does an RV dealers’ association serve? Just how the bill plays out may give a clue. Enter Lynne O’Donnell, a motorhome owner in Murray, Utah. O’Donnell told Utah TV station KSL that she figured it out when she got her renewal notice from the Utah DMV. In 2018, she paid $142.75 to renew her tabs. In 2019 the price skyrocketed more than 300% to $488.25. What happened?

“Age-based uniform standard”

Senate Bill 169 kicked in, that’s what happened. That so-called “age-based uniform standard” meant that it didn’t matter how much her motorhome’s market value was. What owners pay is now based on how old the rig is. Let’s put it another way: A motorhome worth $750,000 that’s between six years old and eight years old would be assessed a renewal fee of $425. A motorhome of the same age but valued at, say, $75,000 would pay the same $425 fee. Under the schedule, a brand-new motorhome, fresh off the lot, pays a maximum of $690, regardless of price.

For motorhome dealers, this has got to be a dream come true. Someone comes onto the lot, concerned about how much money they’ll have to pay in registration fees. The salesman simply assures them that the worst they’ll pay is $690 a year for the first three years. He then gently steers them to that area of the lot where the big-ticket motorhomes are. But like the man says, “I pity the poor immigrant.” To make this a sweet deal for folks who can afford the big-ticket rigs, the balance has to come in somewhere. That’s because the law was written so that the state would not be “out” of any revenue in the deal.

In fact, the bill’s fiscal notes make this statement: “Enactment of this bill may increase the overall tax burden for owners of motor homes by $119,000 in [Fiscal Year] 2020.” That little bit of cream off the top goes to local governments. But who pays for the big boy toys to get a big break on their registration fees? The fine print in the fiscal note adds: “Within the overall impact, some motor home owners may see a decrease in their tax burden of up to $5,955, while other owners may see an increase in their tax burden of up to $690.” A $6,000 break for some motorhome owners is a pretty sweet deal – unless, of course, you happen to be the poor schlep who suddenly sees their registration jump nearly $700.

Freedom of the open road?

For Lynne O’Donnell, one of the “some” who would see an increase, that 300% jump meant her motorhome isn’t the “freedom of the open road,” so ballyhooed by the RV manufacturers. Instead, her dream is now stuck in the driveway. She can’t afford the increase in registration fees.

Ostensibly, Curt Bramble’s bill was written as a response to how much money the state was losing. How’s that? Bramble pointed to states like Montana, where out-of-state motorhome owners can form a limited liability corporation. They then register their rig in Montana where lower registration fees are charged. But with the “assistance” of Utah’s RV Dealers Association, some think something smells suspicious about the Utah law.

Does Utah penalize motorhome owners? Should it matter to you? Many states are bellyaching about the “Limited Liability Corporation” arrangements that they say are cutting into their revenue. Some have reacted by passing laws that make such transactions illegal, and have successfully gone after their own residents who have used the LLC trick. Nevertheless, if Utah’s “idea” of how to respond to LLCs spreads, how long will it be before motorhome owners in other states get a rude awakening with their registration renewal notices?

You can read the full text of the Utah bill here.

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Jennifer R
2 months ago

If the woman from the news report had to park her RV because of a $340 bill, she should probably leave it parked anyway. What will she do if she experiences a component failure?
And, it amazes me how RVers considering “moving” to another state to lower “taxes” generally only look at income taxes, and fail to look at registration costs, vehicle insurance, health insurance, and personal property tax. One must consider total costs to make an informed decision.
For the record, we pay $130 per year for our 2019 Class A in Pennsylvania. As another commenter mentioned, that fee is by vehicle type, regardless of age.

Wm Fiske
2 months ago

I hope that Nevada and Arizona would follow what Utah just did. Instead, those two states base their registration on MSRP. If Utah went to that formula, I could see Utah RV owners crying.

As a seasonal resident of Nevada and Arizona, I will keep my registration with South Dakota where it is based on weight and age (and that creates a reasonable cap).

In the big picture for Utah, I do see where they are trying to keep revenue in the state. If someone buys an RV in Utah, they would like to keep the sales tax and registration fees. If they made it high (like Nevada), people would just use out-of-state addresses (like South Dakota) to pay a reasonable sales tax and registration.

Bob_B
2 months ago

To the authors and editors of the article:

Regardless of your views on whether the change in the tax structure was a good idea, I do have a suggestion. Check your math and some of your facts.

You claim that from $142.75, “the price skyrocketed more than 300% to $488.25.” That’s actually an increase of 242%, and $488.25 isn’t even a number that’s on the fee scale in the law.

By the way, I just looked up the Utah sales tax on vehicles. According to what I read, the tax rate is 6.85%, but with a maximum tax of $900. If accurate, that means that only the first $13,138.69 is actually taxed. Are you not outraged by that?

Finally, the headline, “Does Utah Law Penalize Motorhome Owners?” is pretty misleading, considering that, while many see increases, others see decreases in their charges. The URL for the article includes the word “some,” which would remove some of the bias in the headline.

tim palmer
2 months ago

Well, I am from NJ where we have the highest property taxes in the country. However, after reading about other states that have such high “personal property” taxes, and vehicle registrations, well it all seems to average out.
How is your state any better if your property tax on your house is $4000 but RV registration is $2500 and your auto registration is another $1000, and then of course what ever your “personal property” taxes add up to.

NJ travel trailer $32 whether it is brand new or 25 years old.
NJ dually diesel pickup $121 whether it is brand new or 25 years old.
NJ state average property tax on your house about $8200.
NJ “personal property” taxes…no such thing. You paid sales tax on it when you bought it. So that nice John Deere tractor you bought for messing around on your property doesn’t keep costing you “taxes” year after year.

John
2 months ago

I don’t understand this whole LLC (register in SD or Montana) thing. I live in Florida. I just renewed my motorhome registration, paid $119.95 for 2 years. A 2006 Winnebago Aspect 26A. Even when we first bought it, in 2012 (it was only 6 yo then) I think we paid about the same.

Rory R
2 months ago

And here we go with another political argument, regardless of what started it, it still degenerated into a political argument and it seems it’s always the same people for the most part…

Bill T
2 months ago
Reply to  Rory R

Putting the “argument” aside, it’s refreshing to hear from folks from different states about things like annual registration fees and associated taxes. I had no idea that there was such a huge difference from state to state. I am Canadian and only paid taxes once, on my C Class when I bought it and re-license/re-register for plate stickers, every two years for about 180 bucks.

WEB
2 months ago
Reply to  Rory R

The argument started (politically), in the second paragraph directly under the heading Smelling a rat, where a state senator was named. So blame the writers for their political agenda.

David Binkley
2 months ago

Getting ready to drop several thousand dollars for plates on our new 2021 Renegade.

Thinking of using the tax money that would be used on a piece of property somewhere else and register the vehicle there. Store it there, too.

Dave
2 months ago

In Colorado you are charged ownership tax based on original value for 10 years. My coach plates have been over $3000 a year!

David Binkley
2 months ago
Reply to  Dave

I hear you. I am in CO as well and it is a rip off and the politicians absolutely love it.

Thought about saving the tax money and buying a plot of land in, say, Montana with the money that would have gone to taxes.

Taxes this high just beg people to come up with “alternative” possibilities.

Thomas
2 months ago

It’s been a few years since i registered a motor home but it was around $125. Any size,any age. My fifth wheel is $16 in Wisconsin. No charge for pop up or teardrop trailers

John Bravo
2 months ago

Beware the Big Blue Political Machine

Renewing our 2018 Winnebago Vista this year in Nevada cost: $1016.00

YEAR : 2018 EXPIRES : 06-12-2020
REGISTRATION: $33.00
GOVERNMENT TAX: $982.00 !!!!!!
TECHNOLOGY FEE: $1.00

Total: $1016.00

Plus an extra $16 For a smog test.

Nevada has seen a massive influx of migrants from California. NV and was flipped from a Red State to a Blue state and is paying the price for the privilege of becoming Nevadafornia. This is a heavy price to pay for those who are being forced to leave Nevada because they can no longer afford to live here.

ron
2 months ago
Reply to  John Bravo

This what the states are forced to do to make up for the massive tax break given to big business and the rich in 2017. This was from the red.

Bob
2 months ago

My taxes on my class C are 3 times that in Colorado, Utah is lucky.

Montgomery Bonner
2 months ago

Washington State’s, King Country, needed a way to fund the transit system, instead of raising the price of a ticket, nope, they now tax RV’s based on the suggested Manufacturers Price when new, that number never changes. One gentleman had a Newmar Dutch Star, previously it costs him around 400 annually to register, (believe was 2015 model when we had conversation), he got his new statement, it went up to 2200.00 and change. Lets make sure all the liberals get it, money talks and BS walks, if you raise my taxes, I will do two things, eliminate the thing I have being taxed on, or figure out a place to live which does not tax me to death. Please note the massive exodus from CA and NY over that states taxes. Please also Note, For those leaving NY and CA, please do not bring your politics to my state, I see what you have done to your ex-state, ruined them, now don t start over here.

Kimberly
2 months ago

You do realize that Curt Bramble is a Republican (typically considered conservative) senator, don’t you? So, how can you blame the tax increase on the Democrats (typically considered liberal)?

Matt Johnson
2 months ago
Reply to  Kimberly

Rino

Glenn
2 months ago

Republican Curt Bramble. Nuff said!

Tony
2 months ago

Remember. There’ political greed on both sides of the aisle. I think there’s more of it on the side of the blue.

Denny
2 months ago

Amen!

Roger B
1 month ago

Just vote the offending politician out!! November 3rd is right around the corner.

Tommy Molnar
2 months ago

Years ago, Nevada decided they weren’t getting enough tax revenue on vehicle registration – SO THEY JUST DOUBLED IT! Just like that.

Gary
2 months ago

Sorry, I can’t feel bad for these folks. My November renewal for my 2003 Class A is going to be $750. Yes, $750 is what it says on my Michigan registration. I’m dreading November. 😠

Mark O.
2 months ago

One of the only good things about living in CT is that the 2 year registration for a motorhome is only $112.50. However, you are subject to local town property taxes based on the book value of the vehicle annually. If you have a vehicle that’s 20 years old you can then register it as “classic” and the most the state says the town can value it at is $500. Wonder how that break was put in, the towns hate it.

Kasey
2 months ago
Reply to  Mark O.

Right, CT resident here as well. Low registration, but my local CT town taxes are about $1000 a year for our 2008 Winnebago class C. Hardly a bargain. 8 more years until that tax break, well, maybe only 7 since the chassis is 2007!

Mark O.
2 months ago
Reply to  Kasey

Yup, ours is a 2007, 7 more years and on goes the Classic plate! Already have 1 car and a Honda Goldwing with those plates.

C.Lee
2 months ago

Here in New Mexico, motorhome registration is based upon GVW of the rig, same as a heavy truck for non-commercial use. Our 24 foot class C cost us about $83 a year to register. I do not believe age of the rig enters into it. Utah is right next door, hopefully the New Mexico legislature isn’t paying attention! Our relatively new governor has been on a tax hike spree since she took office.

We luck out with travel trailers..permanent registration is available for them. For about $225, we’ll never have to register our 2019 Passport (which we bought in 2018), again.

Marsha Breen
2 months ago

Be glad you don’t live in Indiana. We pay excise tax dependent on age and purchase price of all vehicles. We financed $150k in 2016 on our motor home and Indiana wanted over $1500 that year for the excise tax.

Jim S.
2 months ago

Well, check off Utah as a retirement location. I hope Ohio doesn’t get word of this bashing of the lower income – net-worth people. Trust me, they ( state law makers ) knew exactly what they were doing as far as favors to their donor base. Their donor base are the people who own the $500k plus rigs. If it saves them $5000 a year, they would gladly write a $2500 donation check to xxxx

Our yearly tags and registration are about $65 a year here in Ohio. No matter what you own. A few years back they increased it $5, and people complained.

I really feel feel sorry for the people who already owned RV’s and now have to live with the big increase.

Tom
2 months ago

Politicians are only interested in getting either elected or re-elected. It is all about the Benjamins. Follow the money trail and you will see who benefits. Not the middle class RV owner, I’ll bet.

friz
2 months ago

“Please explain how the RV Dealers benefited by this? The fee/tax seems insignificant when buying a $500K RV.

Bob_B
2 months ago
Reply to  friz

Disregarding depreciation (just for simplicity), the registration fee on that $500K unit would have been $5,000 per year for the first three years, or $15,000. Now it’s $690 per year, or $2,070. That makes the buy-in price (as opposed to just the sales price) much more attractive, making the sale a little easier, and maybe providing an opportunity to bump the actual sales price by a couple of grand.

BTW, I just looked up the Utah sales tax on vehicles, and read that it’s 6.85%, but with a maximum tax of $900. If that’s accurate, it means that only the first $13,138.69 is actually taxed.