ATA brokers agreement for significant tax break for Alabama motor carriers
Friday, October 30, 2015
Posted by: Ford Boswell
Beginning next year, property taxes on newly purchased commercial trucks and automobiles will be significantly reduced thanks in part to a recent agreement between the Alabama Trucking Association (ATA) and the Alabama Dept. of Revenue that taxes a vehicle on its fair market price rather than the Manufacturer’s Suggested Retail Price (MSRP).
The agreement led to an amended regulation as published in the Alabama Administrative Monthly on October 30, 2015, and is effective for purchases of new motor vehicles beginning January 1, 2016.
In 2014, ATA filed suit against the Dept. of Revenue alleging that the value of new motor vehicles based on MSRP resulted in an inflated property tax. ATA argued that the value of a new vehicle should be the actual purchase price, which is usually significantly less than the MSRP. Negotiations with the Dept. of Revenue resulted in an agreed upon valuation process that better reflects a vehicle’s fair market value. ATA officials said the tax savings for motor carriers will depend on the millage tax rate, but they estimate that it could result in a 25 percent (tax) savings per vehicle.
ATA Chairman Greg Brown, President of B.R. Williams Trucking Co., called the agreement a major victory for Alabama trucking businesses. “The recent tax revision comes on the heels of another agreed upon ruling that led to the apportionment of vehicle property taxes based on miles traveled in state,” he said. “That revision also came as a result of an ATA court suit filed against the state.”
ATA President Frank Filgo added that the basis for his group’s pursuit of these tax revisions was to ensure the equitable taxation of motor vehicles in Alabama. “We believed all along that the tax structure for these vehicles was unfair to trucking businesses – business that already have very slim profit margins to work with,” he said. “The trucking industry already pays its fair share of taxes through other ways such as fuel taxes. Trucking pays 37 percent of all taxes owed by Alabama motorists, despite trucks representing only 11 percent of vehicle miles traveled in the state.”