Oklahoma court rules automobile sales tax will stand, for now

 

by Dale Denwalt  Published: June 30, 2017 2:56 PM CDT

 

The Oklahoma Supreme Court on Friday ruled that a new automobile sales tax will go into effect July 1 as planned.

 

Gubernatorial candidate Gary Richardson sued to block the tax hike and two other measures adopted by lawmakers this year. He also asked the court to temporarily put the laws on hold until his case can be decided.

 

Starting Saturday, automobile buyers will have to pay an extra 1.25-percent sales tax.

 

In a 7-1 decision presented without explanation, the court rejected his motion for a stay. Justice James Edmondson dissented and Justice Tom Colbert recused himself from the case.

 

Oklahoma exempts the purchase of vehicles from sales tax, but a law passed this year reset the rate at 1.25 percent. Car buyers will pay the sales tax along with the usual 3.25 percent excise tax.

 

The new revenue source is expected to bring in more than $123 million over the next 12 months.

 

Richardson responded to the decision, saying the decision will depress car sales and “stall our fragile economy.”

 

“Hundreds if not thousands of Oklahomans are now going to have to make the difficult decision of whether to pay a higher tax at their local, Oklahoma car dealer or wait until after the court hearing in August,” he said. “Until then, Oklahoma suffers.”

 

In his lawsuit, Richardson asked the Oklahoma Supreme Court to invalidate bills that raise the tax on vehicle purchases, create a fee for driving an electric car and freeze the standard income tax deduction.

 

He argues that the bills are unconstitutional tax increases that weren’t properly adopted. The high court will hear arguments on Aug. 8 for Richardson’s lawsuit and two others that have been filed to challenge revenue measures.

 

The tobacco industry sued to block a new $1.50 cigarette fee charged to wholesalers and, in a separate lawsuit, automobile dealers asked the court to overturn the motor vehicle sales tax. In all, the measures being challenged are expected to generate $343 million in state revenue, mostly for health care programs.

 

Richardson is campaigning to be the 2018 Republican nominee for governor.

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